What is BWS Labs?

BWS Labs
8 min readAug 26, 2022

--

A Need for Better Investment Strategies

DeFi is called the Wild-West of investing, and rightfully so. Life-changing gains and losses are within everyone’s grasp these days, as blockchain technology has made it possible for anyone with a smartphone and an internet connection to invest. The result of this accessibility is that the crypto market is largely comprised of investors who lack the experience and technical know-how needed to navigate it successfully.

As a result, the crypto space is far more volatile than Traditional Finance, with a large percentage of the naive investors losing their initial capital and more (or, in crypto speak: getting rekt!).

But what if it were possible to capture a good chunk of the upside of the crypto market while minimizing exposure to the downside?

The solution is building properly risk-adjusted crypto portfolios.

Unfortunately, risk-adjusted portfolios are highly uncommon in DeFi. However, they are standard practice for TradFi hedge funds that prioritize one goal over all others:

The preservation of capital.

You can’t grow a portfolio if you keep losing your principal. Unfortunately, the huge swings in the crypto space result in many investors getting liquidated, with nothing to show for their efforts. Hedge funds understand these risks and are experts at preserving (and growing) capital, using strategies that have been built and battle-tested over decades. Of course, if it was that easy, everyone would do it–so what’s the catch?

  1. These financial products are usually inaccessible to the everyday investor–and much more so to “normal” crypto investors. You usually have to be an institution with millions of dollars to avail yourself of these services.
  2. Hedge fund investment products are notoriously hard to understand. Requiring advanced mathematics simply to begin, they’re often described using financial quant-language that adds a steep and difficult learning curve to normal retail investors.

BWS Labs: Hedge Fund 2.0

This is where BWS Labs comes in. BWS Labs brings the possibility of using sophisticated quantitative hedge fund financial strategies to the DeFi investor. Trading strategies are run by an experienced, fully doxxed investment team with an established track record and have worked for some of the biggest Asset managers in the world. But this is the backend of BWS Labs — or the part you don’t see. We’ve streamlined all the complicated investment processes for you on the backend (like token selection and rebalancing) to minimize the number of decisions you have to make on the front end.

The front end of BWS Labs is a game! This is the part you see and interact with and is the optimal solution to simplifying complex financial products without sacrificing their potency and onboarding a large number of investors. GameFi is not just the most logical bridge between retail investors and institutional-grade financial products; it’s the most fun.

We understand the benefits of size and recognize that to onboard users, we not only need to provide high-quality risk-adjusted returns but also an enjoyable user experience. Most investors aren’t interested in figuring out all the arcane details that go into crypto–but games are fun, simple, and understood by both experienced DeFi users and those new to the crypto space.

The BWS Resort

BWS Resort

The BWS Resort acts as the game interface for BWS Labs. As you can see, each building leads to a vault where you can directly interact with other projects like GMX, Dopex, AAVE, Beefy Finance, Hubble, Colony, Avalaunch, Benqi, or TraderJoe. Instead of opening several browser windows (and ensuring your wallet is on the correct chain), we streamlined bridging and cross-chain processes to be as simple as walking to a different building inside a video game. This is a direct application of how GameFi can simplify and add ease of use to DeFi. It’s also possible to use (and earn) BWS Tokens from inside the BWS Resort.

While most of the resort is free to navigate, the VIP functionalities of the BWS Resort can be accessed through 1-day tickets (25 $BWS), Hall Pass Tickets (staking >2,000 $BWS), or by owning a BWS OG NFT (4,000 $BWS) — the details of each will be highlighted in another article.

BWS Contradas (War Games)

A game wouldn’t be so fun without some actual PVP now, would it?

The BWS Resort is divided into 12 Contradas (Italian for clans). Users each choose one Contrada to represent and fight to increase the ranking of their Contrada over the course of 3 BWS War Games (as in the Hunger Games movies).

12 Contradas start out:

BWS War Game 1: 12 teams compete, while 4 earn rewards and move forward.

BWS War Game 2: 4 teams compete, and 2 teams get rewards and move forward.

BWS War Game 3: 2 teams compete, and 1 team wins and earns the largest pot!

What’s at Stake?

7.2M $BWS Tokens (2% of the total vested supply). Each successive BWS War Game yields greater and greater rewards (more details on how to participate, which will be broken down in a successive article).

If this wasn’t already exciting enough (drumroll….) BWS Wars will also be live-streamed, and members of the BWS Premium Club can place their bets! Even spectators can profit from all the action!

With BWS Labs, you aren’t limited to earning with boring, run-of-the-mill Staking Models. Our ethos is to make investing funner, safer, and more profitable to the average DeFi investor, and the BWS War Games is one of the avenues we chose to actually make earning yield engaging!

$BWS Token

In addition to having a limited supply and increasing value as BWS fulfills its core mission, $BWS token holders also receive several other #RealYield rewards. Token holders will receive:

1) A share of fees paid by ‘paper-handed’ investors in the vaults
2) A portion of the insurance fees paid to the protocol and
3) Increased advancement opportunities within the BWS Partnership, as well as further planned opportunities as BWS, continues to grow.

BWS tokens have a fixed total supply of 360,000,000, and the token is NET deflationary. But investing in BWS tokens is far from the only way to profit with BWS Labs!

Choose Your Own Adventure

BWS Labs offers multiple Investment Vaults, all of which will be accessible inside the BWS Resort Game. Each Vault is its own risk-adjusted crypto portfolio. The goal is simple–to simplify your DeFi investment choices much like you would pick a starting character class in your favorite video game. Each class (or Vault) has a different “playstyle” and is optimized via specific parameters.

Paraphrasing Richard Thaler in “Nudge”, BWS Labs wants to nudge people into theoretically sound investments through gamification.

Volatility Trading Vaults

Usually, volatility is something to be avoided — but not with the BWS All-Weather Vault. The BWS All-Weather Vault turns market volatility into your friend. One of the ways in which it does so is by taking advantage of the fluid nature of crypto markets or their “reflexive dynamics” to ensure that you aren’t just surviving choppy market environments but profiting from them as well while capping your downside to 10%.

BWS AlphaStudio Slick-Interface

Token Insurance & Downside Protection

BWS has a multi-pronged approach to ensuring market-leading risk-adjusted returns. We also offer additional downside protection to our users in the form of the aforementioned BWS All-Weather Vault, which is functionally a multi-strategy hedge fund all by itself. In a nutshell, the BWS All Weather Vault combines a variety of investment strategies that are uncorrelated with each other, delivering overall less volatile returns to investors. Between the token insurance (initially provided by a Designated Market Maker) and the multi-strat nature of the BWS All-Weather Vault, BWS lab users can sleep soundly at night.

Yes, you heard correctly; in BWS All-Weather Vault, users have capped the downside at 10%, but they still enjoy material upside in rallies!

Token Selection

The truth is that most crypto tokens are not good investments–especially those marketed aggressively in CT. So we are very selective about which tokens are included in each vault. We’ve developed a BWS Ready Score to favor capital preservation over absolute returns, dodging the setbacks that affect your average investor — which usually results in many zeros. This score is created with proprietary metrics provided by our in-house research lab, Quantitative Volatility Labs (QVL), and is composed of both on-chain and off-chain metrics. TVL, holder behavior, liquidity, social engagement, founder incentives, and chain reliability all play a part–along with numerous other factors.

Portfolio Rebalancing

However, more important than the choice of an investment asset is the choice of when — and with which exact size — to use for your buys and sells. Both a good and bad investor can hold “on average” the same mix of tokens, but it’s only the good investor that is able to capitalize on market opportunities.

In other words — We optimize rebalancing for you. BWS Labs uses a set of proprietary algorithms provided by QVL (our research lab) to rebalance your chosen vaults according to your settings. Once your Vault Settings are defined, we mitigate your downside, rebalancing your portfolio based on the QVL algorithm and diversifying across multiple variations via an ensemble model.

BWS Partner Program

Our partner program also provides an opportunity for users to get involved. Progressing from the humble rank of intern all the way up to becoming a full partner, we encourage those users with a serious interest in BWS Labs and a commitment to doing what’s in the long-term interests of the firm to join us and ultimately get paid for it!

Users will access the partner program by (i) holding the All-Weather Vault for multiple epochs and by (ii) staking $BWS Tokens. We believe in creating equal opportunities for any investor and hope that the best of our community will gradually filter to the top.

The goal of the partner program is to make its members wealthy without their need to be “Quant Trading Wizards”: we take care of the complicated, boring — but necessary — mathematics for our users.

In addition to financial rewards, we plan to provide several social benefits to our members, including access to exclusive parties worldwide (Noemi, our Head of Parties, will create a new blog post soon).

A ‘Game to Win’ Future

Properly risk-adjusted portfolios are necessary for longevity in DeFi. To grow your earnings, you have to first be able to defend them. BWS Labs offers a rich variety of options for doing so, maximizing your earnings while protecting you from downside risk. Our insurance products and fees bring value to token holders, while our vaults bring strategies to users that would typically require a multi-million dollar investment from interested investors. Meanwhile, the gamification of investing brings more and more investors on board, increasing the pull of BWS Labs and minimizing the risk any one participant takes.

Welcome to the Future. We hope you enjoy your stay.

We’re delighted that we recently closed our pre-seed round led by Avalanche through the Blizzard Fund

— Disclaimer

BWS is a gaming and software development company. We do not provide investment advice but instead institutional-grade quantitative tools embedded in a game interface. All asset management-related services are carried out by an external designated market-maker.

--

--