What is a DARWIN?
  • 21 Sep 2023
  • 2 Minutes to read

What is a DARWIN?

Article summary

What is a DARWIN?

A DARWIN is an independently risk-managed and investable index that combines a trader's signals with Darwinex Zero’s independent Risk Management Engine. DARWINs are generally uncorrelated to other financial assets as traders trade both long and short interchangeably.


The DARWIN thus replicates the trader's signals, entering the markets when the trader places an order but with the risk managed by Darwinex Zero's Risk Engine.

The Darwinex Zero Risk Engine standardises DARWIN risk to a level comparable to the S&P 500 (3.25-6.5% target monthly VaR). In this way all DARWINs can be compared to one another on an apples to apples basis.

DARWIN quote

The DARWIN price or quote is based on the DARWIN's return since its inception.

All DARWINs start at 100 and this quote rises or falls in accordance with the return obtained since their "birth".

darwin quote.png

A quote of 109.06 means that the DARWIN has obtained a return of 9.06% since inception (109.06 - 100 = 9.06%).

Thus the DARWIN quote shows the return an investor would have obtained in theory if they had invested in the DARWIN from the very beginning.

The quote is calculated by taking into account both open and closed trades, as well as execution and financing costs.

The quote is updated every 30 seconds.

DARWIN trade replication: Protecting intellectual property

While a DARWIN replicates the underlying signals in terms of trade timing and asset selection, the actual underlying signals are not revealed so as to protect the intellectual property of our traders.

Why is a DARWIN needed?

Without independent third party validation, people outside your inner circle won't trust you, no matter how good you are. In fact, arguably the better a track record pushed by a retail trader, the more unbelievable it comes in the absence of external validation.

Risk standardization ensures that comparisons across DARWINs - and indeed against external benchmarks - are done on a more apples to apples basis, enabling the best traders rise to the top.

Capital protection
In the event that a DARWIN attracts seed or third-party capital, the Risk Engine adds an extra layer of security protecting capital from any erratic or irrational behaviour by the signal provider in terms of their risk management.

Performance fee collection
Retail traders can't independently manage third party capital and so can't legally charge performance fees. Darwinex Zero allocates seed capital to DARWINs and makes them available to third party capital, collecting performance fees determined by DARWIN performance, allowing us to compensate our signal providers.

Do you want to learn more?

If you want to learn more about the differences between DARWIN and its underlying strategy, we encourage you to watch the following tutorial:

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