Crypto startup Mudrex by IIT alumni lets traders automate and track their strategies
India’s cryptocurrency future may appear bleak, especially after Koinex, one of the country’s leading cryptocurrency exchanges, recently shut down trading services. But that – and the delays by the government in detailing crypto regulation – have not derailed interest in crypto trading. It is this interest that Bengaluru-based Mudrex hopes to tap with its platform that “allows crypto traders to automate trading strategies without writing a single line of code”.
Crypto is now a global asset class and is traded across hundreds of exchanges across the globe 24X7. Crypto trading is built on blockchain, which means each trade carries a rewards mechanism for those who verify it. However, trading is done manually and traders can’t track crypto markets that work 24 hours across the globe.
“Attempting to trade crypto manually is very stressful and futile in the mid to long term. The only way to trade in crypto is via automating strategies,” says Edul Patel, one of the five co-founders of Mudrex. Incidentally, all co-founders have an IIT background.
“There are two problems. Firstly, traders understand trading and logic, but don’t know how to code. Secondly, building reliable infrastructure is cumbersome and expensive, and can take up to $100,000 and six months. It’s not something everyone can afford. So individual traders need something that can automate and track their strategies,” Edul adds.
The Y-Combinator-incubated startup aims to solve this problem with their algorithms, which help traders test their trading strategies on the Mudrex platform, and then deploy them on crypto exchanges. It provides a simple drag-and-drop visual editor to create strategies with the ability to back-test historical data and trade live with dummy money.
The platform is API key-based and integrated with exchanges such as Bitmex and Binance. This allows users to directly trade without depositing any funds.
The founding team
The five founders have set up various companies in the past.
Edul graduated from IIT-Bombay in 2011. He worked with Deutsche Bank, managing risk in FX markets, and co-founded Niffler, with Prince Arora, who graduated from IIT-Kanpur in 2011 and also worked with Deutsche Bank. Niffler received $1 million in funding from SAIF Partners and was later acquired by Tapzo.
Snehil Buxy, from IIT-Bombay, graduated in 2012 and co-founded Housing.com. Rohit Goyal, also from IIT-Bombay, graduated in 2012. He co-founded sabjiwala.com and was also the Founder and CEO of PaxPlay, a gaming studio in Mumbai. Alankar Saxena graduated in 2013 from IIT Bombay.
The startup took its first steps in December 2017; the five co-founders decided to build a crypto exchange. Their crypto exchange was ready on April 5, 2018, when the RBI clamped down on crypto trading on April 10. The startup had to shelve the code and soon realised that there were thousands of traders who did not have algorithmic trading for their assets across the world. They decided to pivot to Mudrex in November 2018 and launched the platform in February 2019.
How does Mudrex work?
Users can start by building their strategy on the visual editor using a drag-and-drop tool to build their strategy. This strategy is then tested on historical data and optimised for trading. Once the user has spent enough time on optimising and is reasonably sure of the strategy, they deploy it on paper or mock trading where traders trade on live markets with dummy money to see the performance.
Users then connect the API keys of the exchange where they have their funds with Mudrex, giving Mudrex permission to execute trades when the user’s strategy triggers a Buy or Sell event.
“If the strategy makes money in paper mode then the user deploys the strategy with real money on the asset of their choice. The strategy continues to buy/sell and trade live. Users monitor strategies actively and deploy funds if they see fit,” Edul says.
Ten of the top traders on Mudrex are running their strategies on trading platforms, and Mudrex expects this to grow to 90 percent by the end of the year. Trade strategies range from $10 to $800. Traders get to keep 70 percent of the share while Mudrex gets 30 percent for every trade closed.
Mudrex claims to have users (undisclosed) from over 50 countries, with 30 percent from India and the remaining from the rest of the world. The founders say they won their first 1,500 users from Tradingview, Reddit, and Discord.
The founders invested $25,000 of their money into the startup. The company was part of Y-Combinator this year, and has received $150,000 as seed money.
Mudrex is yet to monetise the business, and believes that large institutional trading companies can work with them for trading algorithms and they want to monetise the business as they have at least 100,000 users.
A game changer?
What about the competition? Companies like Tradingview are among the largest platforms when it comes to research for traders, but users need to know how to code if they want to trade, and there is no support for crypto. Quantopian and Quant Connect are platforms that provide users the ability to test their strategies. However, users can’t trade and need to know how to code. There are some visual-based strategy creation tools like FX pro (a billion-dollar public company in the UK).
Mudrex has combined the best of all these companies, and its algorithms that automate trade make the difference.
Over the next 18 months the crypto startup wants to improve the kind of strategies users can work on by improving the flexibility of the strategy builder. It will also create a marketplace that allows investors to invest in other traders’ strategies. “Other plans include building wallets that have regulatory compliance across the world, and releasing these algorithms to explore other asset classes like equities and FX,” Edul says.