Algorithm
How do the algorithm works, how can we make sure only the best prediction will be shown to the users.
Result checking
Coinwave is based on a ranking system, like ELO [5] for chess. We can put it simply this way: Is it better to reward or to punish a prediction?
After making a prediction in the app, we check the current price of the token in question, then we record that prediction. The result price is the price of the token when the time frame of the prediction ends. If the prediction is close to the right price of a token, the algorithm gives the points accordingly. The question is now, how much points should we give in this case?
Dozens of factors are checked by the code, here some of them:
- The accuracy : This factor reflects how close to reality was the prediction.
Our algorithm adds a point multiplicator related to the gap between the target price of the prediction and the result price. Users will lose more points when further away from their initial prediction target.
- The risk: The risk factor plays on the price and time parameters.
Making a safe prediction with low values is easier. Predicting the price of a Bitcoin in 1 year is riskier than predicting the price of tomorrow. The risk is also related to the target value called when making the prediction, calling a 120% increase is riskier than only a 5%!
- The rarity: In order to encourage risk taking we consider the rarity of prediction.
This is for users who have the intelligence and data to go against the mainstream overall direction of the market. When the market is bullish for example, we typically expect users to call an increase in a token’s price, the reverse is also true. We aim to highly reward that one talented user who expected the opposite and bet against the market.
Building trust in the data
With our high number and quality of factors analysed every time a prediction needs to be checked, we can give our users the best information!
Our ranking system allows our user's predictions to be shown accordingly to their rank. There is no outside factor that could fake or trick our users. The only way to climb the ladder is to make better predictions. We don't want popular people or influencers with millions of social network followers on our platform if they have no value to offer our users and if their predictions are inaccurate or misleading.
To invest, you need to follow the best, and the best are on Coinwave.
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