Darwinex is planning a very important and positive change for all DARWIN providers in Darwinex Zero and Darwinex.

The change is in response to feedback the company got during a recent webinar for Darwinex Zero clients where many customers expressed their unhappiness with the treatment of the High Watermark (HWM) for DarwinIA allocations.

Currently, the compensation model is based on paying 15% of the profits obtained from DarwinIA allocations with a quarterly High Watermark (HWM). Every quarter, starting from the date of the first investment, the total profits earned are evaluated based on all investments made up to that point. If the total profit exceeds the previous quarters’ profit, Darwinex pays 15% on the difference.

The problem with this scheme is that a trader can receive a very large allocation at a specific moment and, coincidentally, experience a bad streak in percentage terms during the allocation period, equating to a large loss in monetary terms.

Starting in August 2023 and coinciding with the end of the capital allocation period relating to the April 2023 edition of DarwinIA SILVER, Darwinex is going to introduce the concept of “HWM reset” in Darwinex Zero (and very soon after that for Darwinex traders).

When a trader has no open allocations in DarwinIA, fictitious profits will be introduced into their history so that the HWM matches the cumulative profit to origin. This way, in any new allocation the client receives in the future, they will start earning performance fees without having to recover the accumulated losses up to that point.

Very soon, hopefully in September or, at the latest, October 2023, DARWINs from Darwinex will also participate in DarwinIA SILVER and DarwinIA GOLD. This means that the current DarwinIA will disappear. From that moment on, Darwinex will also apply the new criteria to treat the HWM for DARWINs participating from Darwinex.