Social trading is here. Copy a friend, copy an expert.
Dapps that embrace social media within their core mechanics are rising through the DappRadar ranks at a lightning pace. New DeFi dapp Nested taps into social trading and behavior trends to take Web3 applications further toward mass adoption.
The idea of social media dapps has been traditionally restricted by the fact every action on a blockchain requires a fee. Imagine paying to like or interact with a friend’s post, for example. You wouldn’t. While activity can take place off-chain, that’s not the ambition of genuinely decentralized applications.
The rise of EVM compatible and Layer 2 blockchains such as Optimism, Polygon, and BNB Chain tapped into the inherent security and privacy of the Ethereum blockchain without excessive fees, which gave way to a new breed of dapp looking to incorporate social mechanics without having to pass excessive costs onto users.
Dapps to watch
Nested are a non-custodial blockchain wallet and trading app that runs on multiple blockchains and looks to offer something socially driven in the DeFi and crypto world. It offers users a slick user interface, a range of decentralized finance services, and social trading strategies based on other users.
More importantly, users can open accounts using phone numbers, Google, Twitter, and Email accounts. Additionally, they can also connect with Metamask. Nested is seemingly grabbing attention, and users are interested in applications on the blockchain that feel and act like the ones they are used to. Easy social logins reduce friction while more savvy users are greeted with the familiar Metamask connect.
After a shaky start, it shows that dapps with social mechanics are here to stay and could provide the key to mass adoption and onboarding new users into blockchain and crypto.
This DeFi app straddles the line between social media and DeFi trading. The team has focused on building a user-focused app while preserving decentralization and security. Nested is multi-chain, built to scale, and allows users to create, copy, manage, update, send and share crypto strategies called Nested portfolios.
Nested support all cryptocurrencies available on integrated networks: Ethereum, Optimism, BNB Chain, Avalanche, Polygon, and Arbitrum. Importantly, Nested applies a 0.3% fee on basic portfolio operations and 0.8% on withdrawals.
For example, if you deposit $1000 on Nested, you will pay a 0.3% fee on this operation, or $3. Then you will pay a 0.8%, or an $8 fee, on a withdrawal. It’s essential to factor fees into any transactions as, in some cases, it can negate any profit. But moreover, these fees are pretty standard and, compared to others in the space, feel normal.
NFT financial portfolios
While one user may look for strategies and portfolios to copy, the second can monetize their knowledge by earning royalties every time followers replicate their portfolios. Additionally, Nested will allow users to replicate farming and staking strategies in the coming months.
Investment portfolios are unique or customizable financial products. The best way to tokenize them is as NFTs. The main difference between Uniswap V2 and V3 is the latter’s ability to support the tokenization of liquidity providers and LP tokens as NFTs.
The bottom line, It’s highly illogical to represent portfolios as ERC-20 tokens. ERC-20 tokens represent the ownership of standardized products. While users can replicate the portfolios of others on Nested, at any time, they can update the contents of their portfolios.
If ERC-20 tokens represent the portfolios, these tokens would need to have the same underlying assets at all times. This means issues will arise if one person makes a change.
Initial usage is positive
Nested is a multichain application and runs on Ethereum, BNB Chain, Polygon, Optimism, Arbitrum, and Avalanche. A popular strategy employed by dapps that want to spread out and attract more users. By diving into the on-chain data, we can understand which network most users come from and why.
Nested is still young but is already attracting 12,650 unique active wallets across all chains in the last seven days. Those wallets completed almost 20,000 transactions, showing that users are signing up and going further rather than bouncing immediately.
Clicking on each chain reveals what number of users belongs to each. Activity is mainly on Polygon, Optimism, and BNB Chain, which account for almost 12,500 unique active wallets. Polygon has the lion’s share, closely followed by Optimism.
All three chains accounting for the bulk of activity have many users in their ecosystems, low fees, and users primarily accustomed to DeFi dapps. The dapp also runs on Arbritum, but DappRadar doesn’t currently track that network, so we can’t see the data. Potentially the number of UAW connecting is even higher.
The social element of Nested comes from the ability to browse users’ portfolios in an explorer, then copy those trading strategies. The idea is that users no longer need to become expert traders as they can copy other traders, learn from them, and grow as part of the Nested community.
How Nested works
Once a portfolio is created, the user owns a Nested NFT, representing a user’s holdings – up to twelve tokens in one single NFT – all backed by the underlying assets and their actual market value. The owner modifies the portfolio at any moment, and it can be replicated by other users who the strategy’s performance might inspire.
Each portfolio copy earns its creator royalties, designed to incentivize savvy traders to build successful portfolios that make them money and potentially deliver profit to others. Additionally, each alteration made by the original creator of the portfolio will be sent as a notification to all those who have copied it, giving replicators a choice to follow the move or not.
The act of replicating a portfolio lies at the heart of Nested’s intended strategy to democratize DeFi. It is what gives the platform its social dimension and takes DeFi on to the next stage – SocialFi.
Average Joe Example
- I know about crypto, so I created a Nested portfolio by gathering various tokens. I put $1,000 down and decided to allocate it following different percentages on each token I chose for my portfolio.
- My best friend Tom has around $500 in savings that he wishes to invest too, but he does not know anything about crypto – he trusts me. I explained that he could invest his money following my strategy directly on Nested.
- I create a wallet for him that we connect to the platform.
- We go to my profile and copy my newly created portfolio. The Nested Smart Contracts instantaneously buy all the assets on decentralized exchanges and make a replica of my NestedNFT for Tom.
- His $500 is like my $1,000 in percentages, and I receive royalties for the copy.
Carry your Web3 journey with you
With the DappRadar mobile app, never miss out on Web3 again. See the performance of the most popular dapps, and keep an eye on the NFTs in your portfolio. Your DappRadar account syncs with our mobile app, giving you soon the option to receive alerts live as they happen.
This dapp is paving the way for social trading dapps with a sleek UX encouraging easy participation with marked areas where users can dive into others’ portfolios based on their performance.
This includes trending portfolios in the last 24h on all networks—or looking at the most copied traders’ profiles to see why everyone is copying them.
The fact that more experienced traders can earn by sharing their trading strategies is unique and should encourage a strong community of givers and takers. Moreover, the platform deals with several core challenges in crypto and blockchain today.
Firstly they let people onboard in a familiar way with social media and simple logins. Secondly, the fact that many people are scared, uneducated, or unaware of DeFi or crypto can be changed by copying a close friend or somebody making significant gains with an investment as low as a few dollars.
The above does not constitute investment advice. The information given here is purely for informational purposes only. Please exercise due diligence and do your research. The writer holds positions in various cryptocurrencies, including BTC, ETH, and RADAR.