How We Use It — Investment Portfolio
The cryptocurrency market is icessanly evolving at an amazing rate: a couple of years ago it attracted the first investors, whose investments have fully paid off; now the number of ICOs has increased tens of times, but only 3% of them have been successful. Now the cryptoinvestor, like the traditional one, has a need to diversify risks, dividing assets into several projects at once.
Investment portfolio, already habitual for traditional investment method of storage and distribution of assets, quickly adapted to the blocking environment. Each major player now carefully selects a set of tokens and coins in one portfolio for long-term investment, that minimizes risks and brings a stable profit.
But the creation and holding of such a portfolio turns into an backbreaking task, when a holder faced with such problems:
Disintegration. Typically, the investment portfolio includes very large amounts of several coins or tokens, which are stored only separately. This method is difficult to call practical: the portfolio is collected, but is in a fragmented state, that may interfere with the organization and counting. Besides, there are the difficulties with the entry and withdrawal to the stock exchanges, on which the limits are set. Most investors would like to simplify the storage procedure: keep their assets together, in a single portfolio.
Rebalancing. Over time, asset prices in the portfolio change, then the initial ratio of risks and benefits is violated. There is a need to rebalance the portfolio: to sell more expensive tokens and buy cheaper ones. As a result of these actions, the ratio of the sizes of contributions in the portfolio comes to the initial state. Rebalancing is a complex, long and constant process that requires manual computation.
Proportions of assets choice. With the proper management of the portfolio and its creation, investors allocate their capital to different assets in certain proportions depending on the level of the asset’s risk. The main objective of the portfolio is carried out with an ideal balance of all assets, the creation of which is not an easy task, especially for an inexperienced investor.
Our team is working on a product that solves these three main problems — the investment portfolio Multitoken.
1. All assets are combined into one multitoken, which makes it practical and safe to store them in one place, organize work with assets and calculate them. In addition, the investor always has the opportunity to check the ratio of assets, because Multitoken displays it in a percentage. The ability to freely move and trade the token is ensured by compatibility with the ERC20 standard.
2. The Multitoken rebalancing is automatic. A smart contract remembers the original proportions of assets, and when the price of a token changes, the specified ratio in the smart contract is violated, which creates an interest for arbitrage. A smart contract allows an arbitrager to exchange cheaper tokens for more expensive ones, and thereby restore the original proportions.
Because of the high competition between the arbitragers, asset rebalancing doing immediately, as soon as the arbitrager’s interest exceeds the commission for the Ethereum transaction. This is a mutual benefit for holders and arbitragers, which guarantees the reliability of MultiToken.
3. We introduce a marketplace for multitokens purchases, so that the investor can not only create his own token, but also acquire a ready-made portfolio, assembled by an experienced team.
Multitoken is not only a reliable and convenient solution for storing assets and distribution of capital, but also a strategy of successful behavior in the modern cryptocurrency market.
