MyHedge — a tool for hedging risk on MyBit Go.
We are happy to introduce MyHedge, a new risk management solution created in collaboration with Augur to provide hedging options for MyBit Go.
For those who are not familiar with the term ‘Hedge’, it is somewhat analogous to taking out insurance. By hedging against an investment, you are reducing both the risk and the reward associated with a given position. It’s a common tool used in the investment world to reduce exposure to risk.
MyHedge is built on Augur, which is a decentralised prediction market protocol built on Ethereum. Augur provides a platform for people to monetise predictions of events that take place in the real world. In the case of MyHedge, it allows investors to hedge against the risk associated with the revenue generating machine assets they own via MyBit Go.
Some of these risks include: asset manager performance, asset longevity, and asset revenue generation. By using MyHedge, investors now have the ability to adjust their exposure to these and other risks to suit their preferences as they change over time.
For example, If someone invests $300 in an asset on MyBit Go and decides at some point that they would like to be covered in the event that an asset manager abandons or steals the asset, they can then take a position through MyHedge that would pay out $300 should that event take place.
Should the event above happen, while the investor would be in a losing position with their asset ownership on Go, they would receive the corresponding amount through MyHedge. This effectively reduces the risk associated with owning the asset while still entitling the investor to their full fraction of revenue distribution during operation.
MyHedge is yet another tool being developed to bring decentralised finance to a reality through the MyBit Network. You can view the Augur market for MyHedge here, and a quick example we did in here. We are currently relying on the Augur interface but will look into exploring our own design in the future.
Until next time!
The MyBit Team