What if you could make trades on the global financial markets and never lose money? That’s the pitch of UpsideOnly, a new AI-powered trading platform from Perpetuals.com. While the idea is obviously compelling, there is a big catch.
UpsideOnly exists as a kind of fake trading platform where human users trade stocks, cryptocurrencies, and commodities. The idea is that by engaging in these fake trades, humans are providing data to the company’s AI model, BayesShield AI, which then adds that information to what it already has by observing markets and its training data of historical trades.
Aaron Rudder, the company’s chief product officer, told Gizmodo that the combination of signals from human users and AI provides valuable insight. The catch is that none of the trades made by humans will actually happen, at least not immediately.
The AI decides what to actually trade using real money. If the AI loses money based on input from the humans, those humans don’t lose any real money since it was all a simulation for humans to begin with. But if the AI makes real money, a small part of that profit is shared with the humans who wanted that trade to happen.
Rudder previously served as Head of Crypto Research at the European office of FTX before the company imploded in 2022 thanks to Sam Bankman-Fried’s fraud. He told Gizmodo that at its core, UpsideOnly is about making sure users never risk real capital but get rewarded for insights. How much reward? That depends on how much users deposit in a refundable account kept in U.S. Treasury bills, according to Rudder.
The deposit is meant as a human verification method, Rudder tells Gizmodo, theoretically making it more expensive for bots to game the system. Users can deposit anywhere from $1 to a maximum of $500. And users who don’t deposit anything are unlikely to earn much at all, perhaps $0.50 per market, according to Rudder. But he says they want to have faith that they’re operating with real people.
“If you have even $1, then that [payout] significantly jumps because we value your insight a lot more in the context of our machine learning model. So then you could be earning something more like $1, $2, $3, $4,” Rudder explained.
Users who want to deposit the maximum amount, $500, “could earn hundreds of dollars per week, if not thousands, depending on how well you perform,” said Rudder. UpsideOnly also will offer “additional ways for users to win money” that looks at overall performance for the week or month, including the potential for a “jackpot payout for contributing extraordinary signal.”
It also sounds a bit like low level gambling, of course, but the goal is to make sure that nobody loses money, according to Perpetuals. Nobody is supposed to lose big, but nobody is likely to win big either.
The CEO of Perpetuals is Patrick Gruhn, which Bloomberg notes was at the European office of FTX, who clearly wants to assure people that this is very different from FTX.
“The dominant retail trading model is not a tool. It is a trap, designed so the platform wins when you lose,” Gruhn said in a press release. “I spent more than a decade inside this industry and watched the same thing happen over and over. Platforms engineered to extract money from the people who could least afford to lose it, sold to them as investing.”
Gruhn insists that UpsideOnly “completely changes this broken structure,” since human users bring insight and the company brings capital. “This is what the next generation of financial platforms looks like: humans and AI teaming up on the same side of the table,” said Gruhn.
It remains to be seen whether this idea will produce the desired results. But his company promises there’s no risk. At least for the users. The company says 80,000 users signed up for its waitlist and Rudder thinks that significant interest is due to people feeling like they’ve been burned by prediction markets and trading platforms that promised a lot and delivered a rigged game.
“People have just really been burned time and time again,” said Rudder. “And so the ability to trade on their knowledge and get rewarded for it without having to without putting anything up, without a risk of losing, I think is really appealing.”
Again, it remains to be see how this experiment will work out for the founders. But if you want to turn $1 into $3 or $4 while playing with fake money—$100,000 in fake money, we’re told—UpsideOnly might be for you.
