Why Darwinex is not growing?

[nilsstueben]

We can discuss about GFA in the specific thread.
Going back to Dawinex growth (or lack of) the only important parameter we have on their report is the +15% volume in 2021.
It is as positive result bu nothing to do with their x3 revenue growth of 2017 or with the x10 promised by Juan Colon in 2020.

@FXforfun
We can discuss if AUM matters more than number of investors but with the tools provided by Darwinex I can monitor investors movements not AUM movements an BTW single big investments are more come and go than hundreds of investors.
1 million coming from 100 investors in much mor robust and significant than one single investment.

Maybe I can shed a bit of light on this topic as I was fairly involved with this for some time.

Acquiring more investor AuM to the platform is a little more complicated than it sometimes seems at first glance. For big institutional funds and asset mgmt firms to allocate to Darwinex and strategies on Darwinex, they would look at Darwinex as a counter party and hence have to put Darwinex through the institutional onboarding procedure. Darwinex hasn’t been around in its current form for long enough to have a big balance sheet, which becomes an issue for institutional investors. They want to see that there’s enough cash in the bank to cover in the event that something gets funky. There are mid size family offices that are looking to allocate to Darwin’s and the investment volume will grow, it just takes time.
It’s not a case of Juan lying to anyone because he didn’t, if anything he was maybe too bullish on the pace of capital acquisition. At the end of the day if your strategy is good and you go and fundraise you will find money in my opinion. And in the meantime there’s always Darwinia where you can make some extra cash whilst waiting for the big ticket to roll in

just my opinion obviously

 

[CavaliereVerde]

It’s not a case of Juan lying to anyone because he didn’t, if anything he was maybe too bullish on the pace of capital acquisition.

He reduced the performance fees from 20% to 15% and tried to sell this change as good for traders...
Closing the old community ending every discussion on that subject doesn't add to his credibility.
This is the reason I am not so positive about Darwinex as I used to be.
If you want customers to feel part of a family and constructive you don't censor them and destroy 4 years of content created by them.

 

[nilsstueben]

He reduced the performance fees from 20% to 15% and tried to sell this change as good for traders...
Closing the old community ending every discussion on that subject doesn't add to his credibility.
This is the reason I am not so positive about Darwinex as I used to be.
If you want customers to feel part of a family and constructive you don't censor them and destroy 4 years of content created by them.

Fully agree, the 15% instead of 20% hits me harder than anyone else on the platform (literally). I never interacted on the old community pages but for sure I can see your point why this doesn’t give the best vibes.

 

[counter_violent]

He reduced the performance fees from 20% to 15% and tried to sell this change as good for traders...
Closing the old community ending every discussion on that subject doesn't add to his credibility.
This is the reason I am not so positive about Darwinex as I used to be.
If you want customers to feel part of a family and constructive you don't censor them and destroy 4 years of content created by them.

Ah welcome to 2022.

Cancel Culture is in full swing.

If people don't like to hear criticism, they can always run around with fingers in ears shouting LA LA LA LA LA

 

[nilsstueben]

Fully agree, the 15% instead of 20% hits me harder than anyone else on the platform (literally). I never interacted on the old community pages but for sure I can see your point why this doesn’t give the best vibes.

There’s also the element of it being impossible to please everybody, whatever changes you make are always going to have positives and negatives for traders, investors and Darwinex as a company. I guess it’s tricky finding that balance sometimes.

 

[trilobite]

Ah welcome to 2022.

Cancel Culture is in full swing.

If people don't like to hear criticism, they can always run around with fingers in ears shouting LA LA LA LA LA

Just in case people don't know the history, I found the following whilst rooting around tidying up files. It is the "official" reason for the original Darwinex forum closure:

---

After much deliberation and counsel, we’re announcing today that as of November 30, 2020, the Community Forum will no longer be available as a forum to new nor existing users. It will continue to be available as an archive.

This decision is primarily a Compliance risk mitigation measure (more on this below).

We’ve taken the liberty to inform our most active forum users, and would like to extend our sincerest thanks to everyone for all your contributions, feedback and community assistance over the years .

Our decision is explained below, broken down by risk factor.

Regulatory Risk
With Darwinex soon to become regulated by more than one regulator, we’ve assessed that this forum poses a regulatory risk that exceeds our appetite for that risk.
Given that DARWINs are complex investment products, their promotion to retail investors is under high scrutiny by all serious regulators.

Our Compliance Team has been closely monitoring all publications and conversations on this forum (e.g. introduction threads by DARWIN Providers, participation in various forum threads, etc.) and has arrived at the conclusion that the forum in its present state of discourse, does not adequately meet Regulatory Compliance criteria.

Reputational Risk
To a smaller extent than regulatory risk, we’ve also identified the forum as a reputational risk for the company.
As many of you are already aware, we’ve fought a difficult battle over time against “social trading/PAMM accounts” and the “run of the mill FX/CFD Broker” space, putting immense effort towards positioning ourselves in a manner that does justice to who we are and more importantly the target audience we serve.
At our core, we are a FinTech Broker and Asset Manager that takes trading talent from A to B.
Positioning a business correctly requires great care, time and effort, and poses immense challenges in the way of resource-availability.

Having taken several important factors into consideration, we’ve come to the conclusion that brand management and ensuring strict risk compliance would require considerably more intense resourcing to maintain the Forum.

Given that the number of clients actively using and availing any benefit from this forum is unfortunately too small, as a company we are simply unable to justify deploying the resources it needs for a compliant existence.

We appreciate that this post won’t be liked by a few, but are convinced that it’s beneficial for our clients, all Traders and Investors, the Trader Movement and Darwinex.

Thank you all once again for your most valuable contributions over time.

Kind regards,
The Darwinex Team

---

 

[CavaliereVerde]

About commercial conditions you can't please everyone but you can be honest and tell the truth that you can't afford old conditions anymore.
Marketing vs credibility.
I made some calculations and the combined effect of lower fees and lower var they are saving a lot on darwinia.

 

[CavaliereVerde]

It will continue to be available as an archive.

They forgot to announce that the archive would be destroyed after one year....
From censorship to cancel culture .

 

[nilsstueben]

Sure I understand the frustration. Although I do think that as better strategies become live that it will attract more investors. The fact that the top Darwin’s haven’t left the platform maybe also means there’s no better alternative platform out there as of yet. Wouldn’t stress about Darwinex internal decisions, seems like something that’s not in our control

 

[CavaliereVerde]

 

[Captain Currency]

"We’re betting that two megatrends will re-shape retail distribution. The first is Millennials coming of age. They don’t outsource investment decisions to “experts” – they’re far more likely to trust their personal circle or quite possibly handle themselves."

I'd reckon young millennials (and Gen Z) are far more interested in crypto, metaverse land and nonfungible tokens over Darwin investing or even Fx trading. Also the online community aspect / interaction's of alternative investing is a massive deal for these groups. Can Darwinex get a look-in with these next gen investors?

Might be better off targeting old codgers like myself 👴

Full interview here

 

[IlIlIlIlI]

I'd reckon young millennials (and Gen Z) are far more interested in crypto, metaverse land and nonfungible tokens over Darwin investing or even Fx trading. Also the online community aspect / interaction's of alternative investing is a massive deal for these groups. Can Darwinex get a look-in with these next gen investors?

Might be better off targeting old codgers like myself 👴

Full interview here

 

[Forexintradiadarwin]

There’s also the element of it being impossible to please everybody, whatever changes you make are always going to have positives and negatives for traders, investors and Darwinex as a company. I guess it’s tricky finding that balance sometimes.

That is true, however reducing your best traders profits is not the best way to have them happy. Darwinex needs to attract investors throughout the traders, how can you retain the best traders if you are punishing them? If that is a trend...what traders can think that will happen next? Another punishment? Darwinex undermined the competition I guess.

 

[TickCOM]

The reason a provider like Darwinex is not growing, is an interesting question. Is also a classic problem within trading platforms. In this case a combination of being positioned in a segment having limited clients with the wrong offering. Also the FX/CFD segment has a role.

 

[AriaS]

I think it's something in the marketing approach. I guess many people don't really get what it is about and how they can benefit from it. The message should be striking and penetrating. Also, the website design looks a kind of dark and esoteric. I personally like it, but maybe a brighter design could draw more people?

 

[CavaliereVerde]

I think it's something in the marketing approach.

I am not a fan of marketing.
When you have a really good product you don't need any marketing.
Marketing is to convince people that you need something that you don't need or that your product is better than the reality.
I am a Tesla investor.
Lowering payment to traders from 20% to 15% you worsen the product.
With 20% there were 40 new darwins per week, now we are at 20 per week.

 

[IlIlIlIlI]

I think it's something in the marketing approach. I guess many people don't really get what it is about and how they can benefit from it. The message should be striking and penetrating. Also, the website design looks a kind of dark and esoteric. I personally like it, but maybe a brighter design could draw more people?

They never paid the typical internet marketing stuff as other brokers do.

And the website was never user friendly.

About a year ago they appointed Illimar Mattus from Tickmill as a director for both companies behind Darwinex without any results or changes of that step shown until now.

In July they changed the business period to end of the year.

Sources:

TRADESLIDE TRADING TECH LTD filing history - Find and update company information - GOV.UK

TRADESLIDE TRADING TECH LTD - Free company information from Companies House including registered office address, filing history, accounts, annual return, officers, charges, business activity

find-and-update.company-information.service.gov.uk

TRADESLIDE VENTURES LIMITED filing history - Find and update company information - GOV.UK

TRADESLIDE VENTURES LIMITED - Free company information from Companies House including registered office address, filing history, accounts, annual return, officers, charges, business activity

find-and-update.company-information.service.gov.uk

 

[CavaliereVerde]

Exact the website has never been very usable or attractive but 20% reward was attracting more traders.
Real traders are very rare and they are sophisticated customers so they pay more attention to content than to packaging.

 

[AriaS]

Cavaliere, you're right of course. The lowering of a trader's share was not a good decision. Also, maybe the current low leverage is another issue. I think Darwinex is not the only one who experiences slow growth nowadays. Trading became overall less attractive. As for marketing, I still think it's important. I've seen too many good products (mainly in the music and arts industry) that took too long to succeed because they were not marketed well. Darwinex seems to me a bit similar to art. It is a new concept. People need to first taste it in order to love it. But for them to want to have a taste of it, it should be appealing and attractive. I know so many traders who have no idea about Darwinex.

 

[CavaliereVerde]

I think Darwinex is not for the masses of wannabe traders.

It is something like AutoCAD for engineers.
It has to be powerful not easy or attractive.
Trading with a real lasting edge is superdifficult, personally I dont'know anyone who is making a living from trading.

As for the investor perspective, that is also very difficult, the difficult part is to find the right darwins not to use the website.
Understanding scores and filters is manadatory to succeed.