How Covey Is Changing The Investing Model With Peer-Powered Trading
tokens, analysts, crypto, covey.io, people, community, staking, investing, blockchain, leaderboard, investors, immutable, ideas, exchanges, portfolio, trade, pay
Crypto Travels Michael, Brooker Belcourt
Welcome to the New To Crypto podcast designed to guide you through the crypto landscape with pinpoint accuracy created for the new and intermediate crypto investor. Join your host crypto travels, Michael as he takes you through the different facets of getting started and succeeding in your crypto journey. New to crypto podcast brings you new episodes daily Monday through Friday with surprise bonus episodes sometimes on the weekend. Let me ask you, Are you new to crypto and don’t know where to start? Are you more experienced but have questions? Then you’re in the right place. This podcast is designed for you coming at you from the training center in the lifestyle design studio. Here’s your host Krypto travels Michael. Hey, welcome to today’s podcast I’m excited about today. This episode. I have a special guest today. And I’d like to introduce you to he has a background in financial modeling capital markets, fixed income, and equities. And basically, he is the founder of something called Covey which is on a mission to empower everyone to create wealth. I have Brooker Belcourt here today. And in 2020, he actually founded Covey, and we’re going to jump in today. So hey, Brooker. It’s a pleasure to have you here.
Brooker Belcourt 01:24
It’s great to be here. Thanks for having me.
Awesome, man. Yeah, absolutely. Hey, before we dive in, can you just share with our listeners a little bit about yourself?
Brooker Belcourt 01:33
Yes. So now I’m the founder of coffee. I’ve been doing that for a couple of years. Before that, I was at hedge funds as an analyst for about seven years. So investing in technology stocks long and short at Citadel most recently before that, a tiger cub before that Cotu. And prior to hedge funds, I was at Goldman Sachs doing investment banking and covering the FinTech space when it was really early days.
Interesting. Well, what is Covey? Before we dive in and get into all the details, can you just give our listeners just an overview?
Brooker Belcourt 02:12
Sure. So the problem that we saw was if you’re an amazing Investment Analyst and amazing stock picker, the chance of you being discovered on Twitter is almost zero, right? You can raise your hands you can, you can share all you want on Twitter, but people may not trust you. And even if they do, you have no way of like rising to the top, there’s no leaderboard or anything. And that seems like a disservice to everyone disservice to that potential analyst who could become a manager a disservice to all of us as investors who would want to put our money behind this analyst and generate more wealth. And so we looked at sports, and we saw, you know, if you’re a great basketball player, you’re gonna get found if you’re a great baseball player, you’re gonna get found there’s infrastructure set up to find you. They have scouts all over the world. They have different leagues that you can rise up through. And I was always wondering, why doesn’t exist for investment analysts, we need an infrastructure to find the next great investment analysts. And that’s what Covey is, we find and reward the best investment analysts so that anyone can copy them and generate more wealth.
Okay, great. Let’s get into some of the details about Covey. Then so Brooker? How exactly does it work?
Brooker Belcourt 03:36
Yes, so coveys free for everyone you can join, and you go to covid.io you join, and you create a portfolio, a virtual portfolio of equities, ETFs, and cryptocurrencies. So you put in a trade like going long, Aetherium 10%, long Facebook 10%, you can even go short and in different percentages, and then we place that trade for you. And then it’s all virtual, and we start tracking your portfolio. So we track like 50 metrics every five minutes. So you get this crazy hedge fund-level data that you can share with anyone. And the cool part is, is once you place a trade, you’re in the monthly competition, and you show up on the leaderboard, you see where you stack up. Next, everyone else can see how good you are, how bad you are, and what the best people are invested in. And then at the end of the month, we pay out rewards to the best people on the leaderboard.
Okay. Excellent. So, you mentioned one of the benefits for investors. What are earlier are some other benefits for investors besides having access to analysts so for example, if you are I trade on there, do you know other people can follow our trades? Correct? So that’s a benefit for investors. What are some? What are some other benefits of the coffee platform?
Brooker Belcourt 05:09
Yeah, so there are two sides that we serve. So there are these analysts who are really passionate about investing. They’re competitive, they want to show how great they are. And they want to credential eyes themselves. And so they use covering to launch their career and investing since they can share their portfolio to get a job at a hedge fund that can share their portfolio to potentially launch a fund. And they can do all of that without hiring an auditor because we actually record all the trades on a blockchain. So you have this immutable track record, that’s even more powerful than if you show someone your fidelity account. And so that all that stuff is provided for free. And that’s great for the analysts. Now, on the other side, there’s the investor, right, the person who’s maybe not as passionate about creating a portfolio but wants to benefit from the ideas of others. And so right now, we’re building products for them. If you go to coffee, now you can check out different analysts, you can see what the best the top 1% of people on Covey, what they’re invested in what their portfolio looks like, and make sure you’ve got some good idea alignment with them, it’s a really cool topic to talk about, like what they’re holding right now. It’s so cool to see how these people just do so well over long periods of time. And so what we’re gonna be launching in 2023 is, is a way to invest real dollars into the top 1% of analysts through an app so that you can get access to those amazing ideas without having to constantly check out Covey and match those trades and your fidelity or E-trade or Robin Hood account, which is what people are having to do now. So we’d love to make that a little bit easier for everyone.
Fantastic. Brooker, is there anything else like Covey? Or it seems that there was a void or something lacking in the industry, and you basically created a solution for it.
Brooker Belcourt 07:12
There have definitely been companies that have tried to get into this space before and tried to come up with a solution. I think a lot of people have the idea that we should be sharing real track records when we talk on fin twit or real portfolios when we talk on the fin to it that that’s it. Pretty obvious problem. And people are, are trying to come up with solutions to that, like public.com, or common stock. I think what makes me really excited, is I think there’s this undiscovered pool of amazing analysts out there that are sitting in Reddit sitting in fin twit, and we’ve only just begun to learn about them. And the trouble is, we have no way to sort through the noise. There are probably millions of people who love investing in love chatting stocks, but how do we go in there and find the top 100 the top 1%. And that’s really what Covey seeks to do is find the best and elevate them so that we can all benefit by investing in them.
Okay, no, I really like where you’ve gone with that. The idea and elevating them. I know you have a token coming. Yeah, yeah. Can you share with our listeners a little bit about that? And the utility of it?
Brooker Belcourt 08:34
Yes. So definitely on this podcast for reason. I am crazy passionate about crypto, when you use to cover, you really don’t need to know that much about blockchain. To be able to interact, we walk you through the very, very basic steps you don’t need any crypto to interact with coffee is we supply all the gas for you. But there is some really cool stuff that we do behind the scenes. And generally, you don’t talk about it so much. But because this is a crypto podcast, I’d love to explore that. Because it’s solved a lot of problems for us. Right, we wanted to reward anyone anywhere in the world. In some way. We thought about using the banking rails to do that paying them in US dollars. We talked to vendors like Platt and said, How do we pay someone in New Zealand at the same time as paying someone in Portugal at the same time as paying someone in the US? And that was just impossible. So we decided, well, let’s collect everyone’s Ethereum address and reward their tokens to their Aetherium address within seconds at the end of the month. So that solves that problem, right? We pay our rewards out to people’s Ethereum addresses so anyone anywhere in the world can receive it. And then the next problem we had is some of our analysts wanted to build a fund off of this and they were trying to get off auditors to review their track record, if you go to hire a KPMG or Deloitte to review your track record, to make an auditor auditable so that other investors would put money behind you, that’s going to cost you 1000s of dollars. And so we wanted to solve that. So we said, Okay, well, let’s just post every single trade that you make at the time you make it to an immutable ledger so that we can all see that these trades happen exactly when they said they when and we have immutable proof that you were long. Oil and Gas stocks in the beginning of 2022. And you made a killing and there you can’t mess with the blockchain. It’s immutable. And so that solves another problem. And you mentioned we’re launching a token. There’s a whole thing about what that sells for us. I’m so excited about that. We can get into it. But I’ll pause there for a second because we just covered a ton.
Yeah, that was really awesome to hear. You know, I have a friend, who just paid 100. Grand us to, to one of the big firms to do an audit for you. So the fact that you’re making this, you build your platform in a way to help the analysts to make the to show the immutable proof. That’s awesome. Yeah. Yeah.
Brooker Belcourt 11:19
To launch, I tried with a partner to launch a hedge fund. In 2015, we were seated by a famous investor at Tiger management, who’s unfortunately just passed away this past month. But they seated us and we launched the fund, and it cost $300,000 to create a hedge fund. And unfortunately, that fund failed. But that money’s just gone. And it’s like, not everyone can go out there and drop $300,000 to create a fund. So how do we bring that cost to zero? In the early days of when you launched a website, it used to cost hundreds of $1,000 to get a website off the ground. Now it’s free, you can do it with Shopify for like under 100 bucks. And that’s what we hope to give anyone the ability to raise a fund based purely on their talent, and I don’t care about anything else.
Wow, that’s fantastic. Yeah, I mean, these days, you can watch a YouTube video learn WordPress, you know, get a domain build out your own WordPress and, and be operational. So what are some other gems you can share with our listeners about all you have, we have a wealth of experience in the hedge fund industry? You know, what? , anything you feel led to share, We’re all ears.
Brooker Belcourt 12:39
I had a great experience there. I think one thing that was what I really liked at Citadel, which has a very negative reputation in the world, he was kind of the villain, Ken Griffith was the villain in the whole Reddit Wall Street bets saga, which ended with him buying out the Constitution over a Dow that was created to buy the Constitution, which is I don’t know if you did an episode on that. But that was an amazing story. And what I did like working at Citadel though, as it was the closest thing to this idea of a transparent meritocracy that I had ever seen, if you’re an analyst there or a portfolio manager there, you enter all your ideas into software very similar to coffee. And you are evaluated on the performance of that portfolio of ideas every month, every year. And it is purely based on how well your ideas are doing. And not politicking and not how good your PowerPoint presentation was on your Facebook pitch. And that part I loved. And you would see every year they would clean out the bottom 10%. And they would allocate more funds to the top 10%. And they kept doing that. And it can create, like a really, really tough culture. And so you have to figure out a way to make a nice culture out of that. But I love the idea of making something purely based on merit. And I think a lot of the users on Covey also love the idea that it really should be on merit. And the cool thing about Covey is if you’re great, that’s amazing. You rise to the top you got noticed you can share it all. But if you’re not great, you also get to see who’s great and you need to invest in them. So you do have some benefits, as well. If you’re not at the top, it listens cavae
tell us some more details about the token you alluded to some info earlier. And I know it’s a big month for you guys at Covey. And you know, what can you share with us?
Brooker Belcourt 15:00
Yeah, we’re so excited about that we’ve been wanting to launch this token for a very long time ever since we started covering the plan wants to do this, but it takes time to build all the pieces and get a community big enough that that understands why we have a token. So we’re launching this token, essentially, what it is trying to do is a lot of our analysts are really smart, and they understand the data, they contribute to Covey, and these ideas are very valuable. And if they’re going to contribute these ideas in the future, they should be rewarded in some way or share in some way, the value that they have created by adding these ideas to the community. And so at a high level, what we’re trying to do with these tokens, is give back, give back the majority of the value created in this community, to the analysts that created it. And so almost taking data and exchanging tokens.
That’s a high level, what we’re trying to do, how we figured out how to do that is to create a token that has a few types of utility for the analysts. So the first utility is governance, it allows analysts to control how future rewards are paid out and covered. So how roads are paid out? That’s kind of like our bread and butter. It’s how the community determines who the best analyst is, we call it the Alpha algorithm. It’s really cool. We chat a lot about that on our Discord. So there’s governance. The second thing that’s for is staking. What we’re finding is that because coffee is open to anyone, there are a ton of people who create accounts, we don’t know if you’re creating one account, or you’re creating 100 accounts. And so what we want is for you to take cubby tokens, and then stick them to the account that you want us to focus on. And so the staking can influence your rewards. So it can boost up your boards or, or push them down a little bit depending on how much you stake. So that clears away spam and makes our community much more valuable. And the third part, which is really cool, is any products built on the Covey community, we’re going to offer token holders, a discount on the fees for those products. So when we launch, for instance, the copy trading product in 2023, allowing anyone to invest in the top 1%. If you hold a certain amount of tokens, you will get a discount on the 1% fee that we would charge similar to how if you go to buy Nance or go to FTX. If you hold those tokens, you get a discount on the trading fees on those exchanges.
Fantastic. I actually created an account myself. So you guys will see me there. Regarding your token,
Brooker Belcourt 18:11
are you have how high? Are you on the leaderboard this month?
I’ve had some health issues, I’m not on the leaderboard. I need to spend some more wrench time in there. Regarding the tokenomics, there’s the aptest ever will be minted or a million tokens. And at the launch, you’re going to you’re Are you going to MIT 300,000 of them? Is that around there?
Brooker Belcourt 18:34
Yes. So basically, we got a million going out. 300,000 will be given to the equity holders of coffee. So the people who created this, and then 700,000 are going out to the community. And about 100,000 of those will be in grants to help grow the community, building some cool products around the community. And then the core of it, the 600,000 tokens will basically be payouts every single month. So we pay out 2500 tokens every single month. And so that gives us about 20 years of runway to pay out. And then over time, what we’ll see is that the staking like after the 20 years, the staking and burning will start taking over the future supply of tokens to be paid out the in the years out.
Okay. You are absolutely and I see you chose to release this on Ethereum. Tell us and share with us a few details about that.
Brooker Belcourt 19:50
Yeah, it was something we thought about a lot. We really had hoped in the beginning to do the whole thing. I love that ecosystem. We find this So many developers working on it. So you can hire a developer that understands solidity. There are a lot of tools out there a lot of like bugs solve for solidity problems. So it just, there’s a huge network effect with Ethereum. That we found absolutely. And, so we were definitely writing that. And then what we experienced early on is like the cost of posts a trade when we first launched Covey was 10 cents. And it’s something that we could deal with when you compare it with the cost of auditing a track record being 1000s of dollars, 10 cents to create an immutable trade didn’t seem so crazy. But now the price is significantly higher. And so we’ve switched to Polygon. And so we use Polygon to post all our trades, and hopefully, we’ll be able to stick with Ethereum to pay out the token rewards, which is what we’ve been doing so far you receive your token that forwards to your Ethereum address on the Ethereum blockchain.
Very good. Yeah, they Ethereum community is huge. And there are a lot of devs. In it, we actually just released an episode with John Paller, the founder of eath, Denver, so you know, how large that community or counterculture, I guess you would say now has truly grown. So
Brooker Belcourt 21:16
it’s a very powerful advantage once you have that because you create the amount of content that’s created around that, like, when you have a problem and a theory and you’re trying to solve it, let’s say you’re trying to issue a smart contract for some particular use case, having more of a community to reach out to solve that problem makes it way more compelling. And is a big reason why when someone’s
probably encountered that problem before, you know, they might have some great insight on how to solve it. You know, it’s, it’s like, it’s like the old story of riding a bike, you know, why reinvent the wheel? Once? So, Brooke, you shared a little bit in the very beginning about when you got started with Covey. But is there an origin story that you can share with our listeners about how, how this whole thing actually got started? Or was it just out of need or, you know, paints that picture? For our listeners,
Brooker Belcourt 22:13
there is a bit of an origin story. So I left Citadel. And I started investing in crypto in 2019. And I started downloading the entire block theory on blockchain and seeing all the different flows of Ethereum from exchanges. So I downloaded the entire blockchain, and I started to transfer theory into different exchanges. So I started to tag exchange addresses. And I wrote articles on medium about this, and I, they’re still out there. That’s the origination of coffee, you can read them. And so I started to watch the flow. And then I found that the flow was quite predictive of the future price of Ethereum doesn’t really work much anymore. But there was a time when it worked very well. And so I was trading in and out of Ethereum, based on the theory of moving in and out of exchanges. So if there was a ton of eath, flowing into exchanges, that would be a sell signal, right?
Because people would probably take that heat to exchange to sell it. So it’s almost like it could predict the future price over a 24-hour period. And it was working really well. And I started to have started to make money. And I was like, This is amazing. But no one’s ever gonna find me. I don’t I don’t understand, like, no one believes me that this is working. So I was like, why don’t I just post all my ideas to a theory itself to the blockchain? And then at least I’ll have proof so that I could raise a fund for this strategy. And so I then I was like, Well, I also want to show hedge fund level metrics, so you can really evaluate my strategy. And so I built an early iteration of Covey to do just that. And, then other people saw value in it, and I got in the strategy stopped working. And I saw way more interest in this idea of, hey, let’s build a place that we can all rank each other and rank our strategies, and have an immutable track record that we can do anything with, right? Get a job ledger fund, and build an app. And that became so much more interesting. So I built it for myself, I’m still a huge user of coffee, you’ll see me on the leaderboard not in the top 10% Right now, but hopefully soon someday. And so I’m just a power user.
Awesome. I love the entrepreneur mindset and, you know the story of how it got started. It’s exciting that you are now getting ready to launch the token and I wanted to ask you about the roadmap and things to come in 2022 Well, for the rest of this year and beyond. I know you touched a little bit about something coming know next year. For me Listen, traders, and but what would you like to share with the things to come and the roadmap for coffee? Yeah,
Brooker Belcourt 25:11
there’s a lot happening. Right now we’ve got September 30, we will AirDrop the tokens that people have been rewarded for the last few months. Nice. And so then going forward, when you compete in October, at the end of the month, you will receive your Ethereum, wallet Covey tokens. So that’ll happen. And now we’ll start building liquidity for Covey tokens, more and more wallets will start having them. And then in q1, so sometime between January and March 2023, we will introduce staking. And so we first need to get all these tokens out there. And then we’ll introduce staking so you can buy tokens or earn tokens and stick them to your account to increase your awards. And that will also reduce spam on coming. That’s going to be amazing. And then in the summer. So in 2023 is when we’ll have the copy Trading App, which I’m excited about our investors in cubby and VC investors and coffee are so excited about, that’s going to allow anyone to deposit 1000 bucks 10,000 bucks, and invest in the top analysts coming out of this community. And so that, like, if you look at the top analysts coming over a community in 2022, they’re up about 20%.
When the markets are down, these people kill it, they are doing amazing. That’s where it’s like a whole conversation these when you look at our database, and you say, Hey, show me the top 1% of analysts in August, and I want to invest in their portfolio on September 1, you will outperform the market. And this phenomenon is called performance persistence. We’ve seen it in our data, it’s been studied academically, and will be one of the first products that give analysts or gives investors access to this amazing phenomenon that like we should have had for years before we should have had a ranking system, it would be like, yeah, allowing you to invest in LeBron James in high school like he’s gonna do well. There was a way to do that. That’d be amazing. And with investing, there is a way and that’s kind of a,
That’s exciting. Well, I’m looking forward to q1 of next year. And next summer. You know this is, you know, this podcast is called New to crypto. So we have people who are new. And we also have very experienced crypto investors who want to know about a specific topic, your token that you’re going to roll out, will you know, I know some of our listeners may be thinking, what can they do with that token? Can they swap that token later? For like a stablecoin? Do they? Do they sell it back? Do they just keep it on your platform? Like can you break down for someone who might be new about how they can get in and out of your token? Yeah,
Brooker Belcourt 28:05
yeah. So for the period, like right now until year-end, 2022. So for the next three or four months, you will only be able to earn the token. So you have to be a good analyst to get these tokens. Okay, so we’re in this like, super exclusive period, where the tokens are going out to really smart individuals, and you cannot get it any other way. And that’s awesome. Like, it’s so cool to be on this podcast talking about it giving people access, then there’s, you just can’t buy it, you have to earn it, you have to be great. And I love that idea. And then, as we distributed more to more and more people, we will start creating liquidity options so that you can get access to these tokens because come January, to be able to compete in the monthly competition, you will have to stake some cubby tokens. So right now you don’t have to stake but in come q1, you will have to stake and so we’ll have to give people a way to buy these tokens. And then you’ll see liquidity start. And so the tokens the use case for this interim period is, is its credential as you can show that you’ve got a ton of tokens, which means you’re one of the best analysts on coffee and have hundreds of analysts competing monthly. That’s really cool. And then it’s you get to participate in the upside of this community. And so that’s also really exciting. So we’re in like a rare time where, where the tokens are kind of easy to get. Because there are going to be probably fewer users now than there will be in the future.
Awesome. Well, that brings me to how can our listeners reach you and join the community and stay in the conversation.
Brooker Belcourt 29:59
Yeah, we’d love to have you join, we’re on covey.io. Everything’s there, you can join us on Discord. We’re on there talking about how to distribute tokens, how to create staking, we’re talking about a lot of things. Crypto, we’re talking about markets, too. So there are a lot of conversations there and uncovered.io. There are all our socials. So you can see our medium articles, even the stuff that I wrote going way back about betting on exchange flows. And you’ll see our Twitter feed there as well.
Nice, we’ll have all those links on the episode Blog Post page, to your site and your socials as well. So make it easy for people to jump in and join the community. You know, and you mentioned discord. So they can have moderators on there and they can even reach out to you or see what you have to say there. Yeah, yeah, you’ll
Brooker Belcourt 30:53
see us there. It’s you’ll see Brooker and Sarah and John and Carlson, our team is all on there. And we’re actively fielding questions and yeah, we love our community. So it’s really fun to chat.
Awesome. Brooker. Is there anything else you would like to share with our listeners?
Brooker Belcourt 31:12
No, we look forward to seeing you in the community. And I hope we can get Michael on there to share his portfolio and you can compete with Michael and me and see who’s the best analyst of us all. So yeah, I look forward to seeing you on the leaderboard.
Absolutely. Well, it was a pleasure to have you drop by today and share this insight with us.
Brooker Belcourt 31:35
Yeah, it’s great to be here. Thanks for having me.
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