Brokers, It’s Time to Embrace a New Era: The First Decentralized Brokerage System

Shield Official
4 min readApr 24, 2021

Crypto derivatives, perpetuals in particular, are extremely sophisticated. Even its mainstream financial counterparts have proven to overwhelm new users, making a successful brokerage system almost necessary. Especially for a new product looking to disrupt the market, like Shield aims to do with our risk-free perpetual contract — a well-thought-out affiliate and referral system is absolutely crucial to the success of the platform. Shield is the first one to implement a brokerage system on chain in DeFi space.

Staying true to the spirit of DeFi and cryptocurrencies, we have decided to make our brokerage system completely decentralized — the first of its kind. Your rewards for referrals and affiliations will be completely on-chain, making even the brokerage a trustless process.

Leveraging on this, Shield will create a positive feedback loop and momentum, solving the transparency problem in the traditional brokerage system.

How Shield’s Decentralized Brokerage System Works

The affiliate and referral information are recorded on the blockchain through the referral code that is automatically generated by the system. Once the referee initiates his/her first trade using the referral code generated by the broker, an affiliate relationship is initiated through a smart contract.

Once commenced, the broker will automatically receive commissions. Take a look at the following image to fully understand how the decentralized brokerage system works.

The Commission rates

Shield uses a competition-based commission rate system as a method to incentivize more referrals. Brokers are ranked into three different categories, based on their performance, and different brokers receive different commission rates. The top 20 brokers in a month will be classified in level A, 21–50 in level B, 51–100 in level C, and the remaining brokers will be categorized in level D. Take a look at the table below

Each transaction in the referral program is entitled to 40% of the transaction fee as the commission rate. Brokers in level A and level B will receive the entire 40% as commission, while level C and level D get 30% and 20% respectively. The undistributed referral rewards (10% from level D and 20% from level D) will be injected into a reward pool.

The entire sum in the reward pool will be distributed to the brokers in levels A and B in the ratio of 60:40. Once the rewards are distributed after 30 days, the levels are reset, and the brokers start again with an empty slate.

Along with rewarding active members of the Shield Community, this referral program also incentivizes the members to actually give back to the community and encourages them to actively teach new members. Shield aims to provide the world with the next generation of decentralized derivative infrastructure, and this is only possible with the active contribution of the workers.

Go ahead, give the platform a try, and recommend the platform only if you’re convinced by what we offer.

How to become a Shield Spark?

Where Can I Learn More?

Shield aims to offer you everything you need to know for your trading experience to be as smooth and positive as possible. The product is currently in the testing phase (testnet is live now, go ahead, check the platform out!), and as the product matures, we are planning to come up with more resources in our blogs, such as the step by step guide to decentralized risk-free perpetuals.

However, this is only just the beginning for Shield as a platform, as we are planning to release more products in the pipeline with the maturity of Polkadot and Ethereum Layer 2. 2021 promises to be a significant year in the history of Decentralized derivatives, as Shield is all set to take the industry by storm.

Go ahead, and check out the Shield Whitepaper for more details on what we have in plans for the future, the liquidity mining rewards, the funding-fee structure, and most importantly — SLD, the governance token. Be a part of the revolution and join the testnet now. Don’t forget to follow us on Medium & Twitter.

P.S. Be on the lookout for testnet competition’ incentives.

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Shield Official

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