Listen to the Article: What Do Brokers Do As More Traders Turn to Discord?

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At the end of April, Fazzaco learned that Match Trade Technologies had announced an update on their website, allowing users to log in with Discord accounts. In fact, whether it's brokers, prop firms, or fintech companies, they often provide direct login with the accounts of platforms where potential clients gather, such as Google, Reddit, or Microsoft accounts.

Match Trade's integration with Discord seems to offer a fresh perspective to the industry. After all, Discord, once exclusively for gamers, has evolved into a new gathering place for many retail traders, especially prop traders.

Discord: A Social Media Platform Designed for Gamers to Team Up

For young people in the 2020s, besides TikTok, Discord boasts a large user base. In 2021, Microsoft proposed a $12 billion offer to buy Discord, but was rejected because the Discord owners thought that the application still had great growth potential.

Their confidence in rejecting Microsoft's offer is well-founded. If you visit major campuses in America or Canada, chances are Discord is most likely one of the the commonly used social media platforms for students. Unlike TikTok or Instagram, Discord is more closed and private, akin to Telegram. Moreover, compared to P2P comms like WhatsApp, Discord is more open and offers a plethora of features (such as the recently popular AI, Midjourney, which is based on Discord bots). It has indeed found a comfortable middle ground between openness and privacy.

In 2015, Discord was founded and defined itself as an "always-online chat room," after realizing the poor quality, latency and frequent disconnections in other gamer comms apps, and it soon became a semi-open online space specifically designed for gamers to team up. However, as more and more players continued to engage in discussions on Discord even after games, the platform paved the way for expansion into other fields.

Is It A Good Idea for Brokers to Dabble in Discord?

Match Trade, announcing its integration with Discord, naturally agrees that "it is a good idea." According to their CEO, "Many prop firms have already established channels specifically for Discord, greatly simplifying the client onboarding process. This is no different from integrating with Google accounts."

David Kimberly, who specializes in forex CFD column writing, recently mentioned in his article about Discord, "There is definitely a logic to this. To use a different example, we are seeing more providers add TradingView in some shape or form, purely because this is what traders want to do."

According to search results from the public Discord server listing community, Disboard.org, there are as many as 6,714 servers tagged with "trading" and 5,114 servers tagged with "crypto." Taking the server Trader Capital LLC as an example, according to its description, "Day trade & investment server for everyone! We trade Options Contracts, Stock Shares, Crypto etc...."

So why has Discord attracted so many retail traders in such a short time? Firstly, it's due to the app's ease of use, excellent experience, and the word-of-mouth effect achieved through the overlap between gamers and traders. Retail traders tend to discuss trading advice and market trends online and naturally choose the most user-friendly platform. Thus, after successfully attracting numerous traders, Discord has created a network effect.

A Hotbed for Scammers?

As a public space, Discord is not only a hub for traders and brokers, but also scammers. Since chats on Discord are not encrypted, anyone joining a channel can see chat logs, leading to security risks such as impersonation of brokers for scamming purposes.

As mentioned in Kimberly's article, Desmond Leong, founder of Rockqet, discussing the differences between prop traders and those trading through brokers, said, "If you join a prop Discord channel then it's not uncommon to be messaged within minutes by someone pretending to work for the company or someone else just trying to scam you."

Crypto trading is scam-ridden as well. Hackers can steal others' digital assets irreversibly at light speed by simply sending a malicious link. Last year, hackers took control of several Discord servers popular among NFT collectors, such as the Bored Ape Yacht Club and the NFT trading platform OpenSea. Once hackers control the servers, they can manipulate bots trusted by the administrators to publish false announcements, deceiving victims into giving up their tokens or NFTs.

Evgeny Sorokin, CPO of Devexperts, expressed his views on brokers using Discord in a post on LinkedIn earlier this month: "Part of the appeal of Discord is that it makes it simple to break up content into different areas that you can easily switch between...While it's true that Discord's layout allows for limitless threads that can easily be switched between, it's not normally used in this way by firms. Typically we see 1-2 threads used for a broad range of topics, and the remaining threads are stagnant...We can imagine how marketing and brand content like announcements and promotions could be easily ignored by the end-users."