I ready myself. Take the right position and pull off. My finger scantily touches my screen, and just like with IRL slot machines, thousands of notifications fly by until the wheel slows down. White text on a black background. Trish bought 17940209845 of $RIDE*. Trish. That name keeps popping up. Tap, tap, tap. Impressive trades. My mind freezes.

Which trade to copy?

The app isn't helping, but the will is strong, taking roots like weeds rotting my brain. “I want that,” I tell myself like that spoiled kid in Charlie and the Chocolate Factory. Only I don't have a rich (sugar) daddy who can give it to me.

Collect NFT

Trading is the most social activity you can think of. You can't do it alone. You always need a counter-party. A trading partner. Exit liquidity.

But you also can't find alpha on your own. You need to have your cabal, you need to be in group chats. You need friends. Alpha is good alpha when you hear it from more than one person. This wisdom is as old as humans.

One witness shall not rise up against a man for any iniquity, or for any sin, in any sin that he sinneth: at the mouth of two witnesses, or at the mouth of three witnesses, shall the matter be established. Deuteronomy 9:15

But if he will not hear thee, then take with thee one or two more, that in the mouth of two or three witnesses every word may be established. Matthew 18:16

The Interface app for iOS and Android by co-founders Annoushka and Wijuwiju taps into the human desire to be with friends and share your wins and losses. The app doesn't do a timid tapping, like a gentle nudge. Interface securely attaches its tentacles to our social brain, pinging exactly the right region. It's genius. For as long as the hype is working and the candles are green, people will copy trade.

I missed $CLANKER. I missed $LUM. I was too late for $blonde to cash in. Eager not to miss it, I missed the most obvious of all crypto-UX flows: You tap twice. Always twice. You tap to approve, and you tap to sign. And then you tap your fingers on the table, impatiently waiting for the transaction to go through. You watch the numbers scramble. You watch and tap.

My generation has lost it all already twice. Left university to march directly into a recession. I was the last new hire before financial chaos froze recruitment. But we made it out the other end. Only to bear kids and walk into a pandemic. You sat at home struggling with remote work and remote school while worrying about your family and friends you can’t visit. We have nothing to lose, still bearing on our back the lashing from society's last beating. So you give the middle finger and put your savings into the first notification Interface suggests you copy trade: BHAG*, big hairy audacious goals.

STOP!

Do you ever wonder why you keep clicking copy trade? Do you stop for a split second to squeeze in a mini-mediation on your feeling of fear and desire to fit in and be like the big boys and girls? Small fish do that all the time. Whales don't care about social interaction and discount it during trading. It’s a fact [1].

tldr of how to become an influential trader: Copy wisely, don't just copy-pasta.

When a trader evaluates another’s trader's action, their decision to copy or not is influenced by the original trader’s experience, popularity, and career [2]. So yes, your LinkedIn profile still plays a role. Go and update it, anon. But be careful when copy-trading. You can’t just go and copy everybody. No, everything has a dark side. So imagine you want to be like Annoushka, making it copy-trading memecoins. You go and copy every one of her trades. Your end goal is money and popularity. But, what do other traders see? They see you trading the exact same way as her. So, who should they follow? Annoushka or you? The point is, if your trades have nothing special to offer, there is no reason why anyone, AI or human, should copy what you are doing [3].

I have to disappoint you. Reality is a bit more complicated. The above example holds for leaders. That’s accounts with 50k** and more followers posting bangers and making magic internet money. But leaders following leaders leave followers confused about who the real leaders are. Maybe that's how cults form? Leaders trying to out-lead other leaders and demanding in-humane dedication from their followers on the thread of being replaced by ai. On the peasant level, followers copying each other isn’t an issue (who pays attention to them anyway?). Scientists aptly call it the herding effect: followers blindly copying followers. It's not a hot take. It's how memes are born.

There's more behind copy-trading than what the monkey sees, the monkey does. As humans, we are constantly comparing ourselves, seeking to gain more social currency, the magical mind token that exists in everyone's brain. It’s just shit that this social currency isn’t traded openly. It suffers a lot from information asymmetry. Your way of gaining status isn't my way. It’s a mess I tell you. A mess.

Humans (I’m talking about the imaginary generalist "human" scientists work with) worst fear is to lose out when everyone around us is winning. This isn’t just purely a crypto phenomena. It’s not like crypto invented the casino and the fear of missing out on the gains your friends are making. Fear of losing when your friends are winning is powerful. Doesn’t matter if the party is on the street when your zip code was pulled by the Dutch national lottery, or on your timeline. Losing when everyone is winning sucks. In that moment it doesn’t matter if you did the math and knew that playing that game was a dumb move. You are a human being. You lost. Everyone else won. You feel crap.

You want to survive crypto both mentally and financially? Be like Phineas Gage. Become a sociopath and remove your ventromedial prefrontal cortex. Then you can watch the numbers go up and down and not worry. You did proper DYOR. You went beyond the tweets. Oh, how great it would be to not worry about watching those numbers.

But before you take up the knife, I'm gonna sell you another solution for the price of collecting this article. An easier, more humane one. Don't believe me? I got science to back me up! Those people, aka wallets, who survived the 2017 crypto bubble, transacted with a lot of other wallets. They had "friends," and those friends had friends. And all these friends were transacting together, sending coins to and fro [4].

You can't survive crypto without friends. Copy their trades*.

*of course not financial advice.
**random numbers I came up with. Most probably higher.

[1] Ammann, M., & Schaub, N. (2016). Social interaction and investing: Evidence from an online social trading network. St. Gallen, Switzerland: Swiss Institute of Banking and Finance, University of St. Gallen. But don’t search for the article. Academic publishing is a mess. The working group paper with the finding has been removed from the university website. This could mean the paper has been submitted for publication and the publisher requested for the old version to be taken down. As a researcher once you publish your findings in a reputable scientific journal, the publisher owns the copyright of it. And you know to whom they sell the academic papers? Mostly to universities.

[2] Kromidhaa, E., & Li, M. C. (2019). Determinants of leadership in online social trading: A signaling theory perspective. Journal of Business Research.

[3] Liu, Ye and Yang, Mingwen and Tan, Yong, Coevolution of Trader Networks and Follower Dynamics in Social Trading (August 1, 2023). Available at SSRN: https://ssrn.com/abstract=4528456 or http://dx.doi.org/10.2139/ssrn.4528456

[4] Bonifazi, G., Corradini, E., Ursino, D., & Virgili, L. (2023). A Social Network Analysis–based approach to investigate user behaviour during a cryptocurrency speculative bubble. Journal of Information Science, 49(4), 1060-1085. https://doi.org/10.1177/01655515211047428

041 The genius of copy-trading or why you need friends in crypto (nfa)