Here we have discussed passive vs. active investing before. Let us revisit the idea with a practical approach to applying active and passive strategies within the cryptographic asset ecosystem (including of course, steem). Our first and final step in this investigation would lead us to conclude the majority of cryptoasset holders are active investors - individuals who trade several times/week at least. An informal Twitter study revealed that many in crypto are frequent traders --
After investigating some of the options for passive crypto portfolios I was surprised to learn that there are few serious options. Think about that. $375 billion in nominal valuation (https://coincap.io/) as of today and not one reliable way to deploy passive investing strategies at scale?
It is worth noting that users of bitshares and steem have benefitted from stable options for years. Despite this, stable coins in general have yet to have much success across the general cryptosphere. If you are an early adopter of either of these Graphene based chains (and if you have used them at all yes you qualify as an early adopter relative to the world population) then offer yourself a pat on the bank.
For the rest... Make no mistake, the herd is coming. The mythological financial institutions, perpetually cited as being around the corner and exuberant in their desire to implement digital assets and blockchain technology. They may finally get involved when simple problems like passive strategies and stable assets are supported at scale. Still for now the most significant institutions remain on the sidelines.
Within the crypto space there are numerous projects that have gained hundreds of millions USD in investment to build stable coin protocols; especially on Ethereum. A solution for both financial institutions and Mom-and-Pop will win the day. In my research I have found such a solution. Twentix.
First, some bitshares history. In 2015, a smartcoin on the bitshares platform was released called Bit20 (BTWTY). This token was pegged to track the value of the top 20 cryptoassets (measured by market cap). If you are familiar with how bitshares smartcoins function you likely know what happened next. While the BTWTY smart contract operates autonomously there is one Achilles heel. It is imperative that community members keep this fact in mind. The weakness (and greatest strength) of bitshares smartcoins is that the smart contracts themselves refer to a collateral pool funded with bitshares. If bitshares consistently falls relative to the specific asset price feed then that particular smartcoin is probably heading for global settlement.
Global settlement. Clearly, when the collateral of bts smartcoins deteriorates siginificantly the market is in trouble. This happened to BTWTY. Take a look at the top coins on the first day of the BTWTY index – http://www.twentix.info/bit20.php?&page=bit20. Bitshares was the sixth largest coin by market cap. Today it is in the 30s. This simple fact is all I need to know and understand why global settlement occurred. Bitshares’ drop out of the top 20 was a critical moment for all indexes collateralized by bts. It changed the mathematics in a way this author finds very beneficial for the future of the index coin on bitshares.
A creative solution. Twentix embodies the same ideas of the earlier Bit20. The most notable difference is the decimal – each twentix unit represents a much smaller fraction of the value of Bit20. Each twentix trades for about $1.50 USD. Yes that means twentix is accessible to every portfolio. Look out for more updates on Twentix and the cool projects and partnerships DaoStreet has organized. We are here to learn from each other. Please share any thoughts/concerns/questions in the comments below.
This is not financial or legal advice. There are risks associated with any activity including cryptoassets. The best investment to make when beginning is investing time in learning about the technology. This knowledge will reward more consistent dividends throughout life. Learn more about twentix at http://www.twentix.info/
