The Future of Crypto Asset Management?
Our approach to building a crypto multi-manager trading platform
Protos is an actively traded, tokenized hedge fund for cryptoassets. Our public sale ends December 15th. Invest now at protos.tokenhub.com.
As we first shared Wednesday, we’re excited to announce our plans for PRTS2, a multi-manager crypto trading platform and utility token.
Today, we’d like to share how we’re approaching the project, and ask for your constructive feedback.
What is a Multi-Manager Platform?
It’s our belief that employing multiple managers with differing strategies has long been a very successful approach taken by investment firms, in order to diversify and reduce risks, while maintaining returns.
The creation of strategies has traditionally been centralized in leading investment firms. Our platform aims to decentralize the system by opening up necessary resources to a wider audience.
With our proposed multi-manager platform we intend to connect holders of large amounts of capital with leading strategy developers, such that virtually anybody can become an asset manager.
PRTS2 will provide crypto traders with the tools they need to build, test and run quant trading strategies.
1. Extensive data sets for research and backtesting
“The goal is to allow traders to fine tune strategies without having to assemble large datasets and build backtesting frameworks themselves.”
Our goal is to provide traders with an overview of latest strategies, what they are, how they function and by also including historic returns on our platform.
We will provide datasets and key financial indicators which can be used to delve deeper into the material and search for signals on which it might be possible to trade.
The data will also be used to backtest strategies. Traders with proprietary datasets will be able to import them for use on the platform.
Ultimately, the goal is to allow traders to fine tune strategies without having to assemble large datasets and build backtesting frameworks themselves.
2. A trading and custodial solution
“designed to speed up development, testing and implementation of trading strategies.”
The platform will include a hosted IPython environment to develop strategies and provide access to the underlying data sets. This infrastructure is designed to speed up development, testing and implementation of trading strategies.
We expect that traders will be able to execute trades with the built-in trading engine. This engine will allow for executing methods like VWAP or best execution, with a focus on enabling execution across all major exchanges.
In addition, we’re building custodial solutions that will allow for the safe storing of tokens off exchange, while maintaining the ability for flexible and rapid trading.
We are also planning to apply zero-knowledge proof to hide the trading strategies unless the contributor has been paid for with the PRTS2 token. A general user will only see the performance of a strategy, but not the algorithm behind it. Only if a user paid the defined amount by the developer will the user get access to the algorithm.
“the contributor retains their work product and gets paid accordingly.”
That way, the contributor retains their work product and gets paid accordingly. Even Protos would not have access to those strategies unless we pay for them.
3. Incentives and Rewards
A guiding principle of PRTS2 is that creators of effective trading strategies should not be constrained in their earnings by a lack of access to capital.
If institutions or individuals with access to capital want to make use of selected strategies from the platform, they will have to pay for them with PRTS2 tokens. The strategy developer can set their own fee structure according to general rules and standards in an effort to receive fair compensation for their efforts.
Additionally, the top strategies will be rewarded in the form of PRTS2 tokens for maintaining a position on the PRTS2 leader board every month. The leaderboard will consist of strategies that have the best out-of-sample performance over the longest period of time.
We are exploring ways in which we can support developers to continually improve their strategies, so they continue to earn their spot on the leaderboard.
A guiding principle of PRTS2 is that creators of effective trading strategies should not be constrained in their earnings by a lack of access to capital. Our experience is that individual asset managers have capitalized around superior access to capital, while great developers struggle to deploy large amounts on their strategies. Ideally in our view, effective strategies receive liquid fund allocations that fully reflect the success of the strategy at any point in time.
We expect that the decentralization of trading strategy creation combined with a transparent and fair economic incentive system is well positioned to solve this.
PRTS2 Token Economics
PRTS2 is a utility token that will be “airdropped” to PRTS token holders and issued in a new ICO to finance some of the building of the infrastructure
What is an airdrop? An airdrop facilitates an automated, and free of charge, delivery of PRTS2 token to PRTS token holders.
The token will be used for:
Accessing data, backtesting, trading and custodial functions.
- For using these platform services, the user will have to pay a small number of PRTS2 tokens.
Using strategies.
- Users have to pay for access to trading strategies, i.e. pay the license fee that the contributor defined.
Rewarding traders for leader board.
- Once the platform receives PRTS2 tokens, these will then be distributed among the leaderboard. We believe that the largest contributors should be rewarded accordingly and therefore receive large reward for their strategies and work.
It is expected that a fixed amount of PRTS2 tokens will be issued, up to 50% of which could be airdropped to PRTS token holders, while the remaining tokens would be sold in an additional token offering to raise funds for development.
Timelines
Protos will be a customer of the PRTS2 platform, and will benefit from its implementation.
We expect to have a Minimum Viable Product (MVP) by Q1 2018, with PRTS2 tokens being airdropped to PRTS Token holders by Q2 2018, followed by an internal roll out of the PRTS2 platform.
We expect initial public beta test of the PRTS2 Multi-manager platform to begin in late Q2 2018.
We need your input.
We’re still in the early stages of defining PRTS2. Your input and questions at this point are incredibly useful to us.
We hope you’ll add your questions and comments below or join us on telegram.
Protos is an actively traded, tokenized hedge fund for cryptoassets. Our public sale ends December 15th. Learn more at protos.tokenhub.com.
Legal Notices
This article does not constitute an offer to sell or the solicitation of an offer to purchase the PRTS Tokens or the PRTS2 tokens (collectively, the “Tokens”), nor shall there be any offer, solicitation or sale of the Tokens in any jurisdiction in which such offer, solicitation or sale would be unlawful. The Tokens have not and will not be registered under the Securities Act, the Investment Company Act of 1940 or other applicable state securities laws, and may not be offered or sold in the US absent registration or pursuant to an exemption from registration requirements of the Securities Act and under applicable state laws. The PRTS Tokens are being offered in the US on a limited basis to a maximum of 99 accredited investors under exemptions from registration under the U.S. Securities Act of 1933 (the “Securities Act”) pursuant to Regulation D, Section 506(c) under the Securities Act, and the rule promulgated thereunder. No person in Singapore, South Korea or the People’s Republic of China shall be eligible or permitted to, whether directly or indirectly, subscribe, purchase or acquire, or offer to subscribe, purchase or acquire, any PRTS Tokens.
In any member state of the European Economic Area, the PRTS Tokens are only being offered to qualified investors as defined under Directive 2003/71/EC (as amended, including by Directive 2010/73/EU, and includes any relevant implementing measure in each member state). This communication is directed only to persons who (i) are outside the United Kingdom; (ii) are persons falling within Article 19(5) (Investment professionals) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended, the “Order”), (iii) are persons falling within Article 49(2)(a) to (d) (High net worth companies, unincorporated associations, etc.) of the Order, or (iv) are persons to whom an invitation or inducement to engage in investment activity may otherwise lawfully be communicated (all such persons together being referred to as “relevant persons”). This communication is directed only at relevant persons and must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this communication relates is available only to relevant persons and will be engaged in only with relevant persons. This document is a summary of the terms that will be outlined in greater detail in the offering memorandum by which this document is qualified in its entirety, and any investment decision should only be made following a review of the offering memorandum.
This document contains forward-looking statements, which can be identified by the fact that they do not relate strictly to historical or current facts and may include the words “may,” “will,” “expect,” “intend,” or other expressions of similar meaning, including statements with respect to use of proceeds of proceeds of the offering, distributions and repurchases of tokens of portfolio companies and use of funds received from dispositions of portfolio companies. . These forward-looking statements are based on the current expectations and a number of factors could affect future events. You should carefully review the section of the offering memorandum entitled “Risk Factors” for a discussion of factors that could affect future events implied by these forward looking statements and other risks associated with an investment in PRTS Tokens. Certain statements contained herein represent the opinion of the members of the management team of Protos Cryptocurrency Fund Ltd. and are based on certain assumptions and facts, any of which may change at any time.
The PRTS Token does not represent or qualify as an interest in the PRTS Token issuer or Protos Cryptocurrency Fund Ltd. and do not grant any equity or voting rights in, or a claim against, the PRTS Token issuer or Protos Cryptocurrency Fund Ltd. Furthermore, the PRTS Token is not, and does not represent or qualify as, a fund unit or structured product.
PROSPECTIVE SUBSCRIBERS SHOULD BEAR IN MIND THAT PAST OR PROJECTED PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS, AND THERE CAN BE NO ASSURANCE THAT PROTOS OR PROTOS 2 WILL ACHIEVE COMPARABLE RESULTS OR THAT TARGETED RETURNS WILL BE MET. LOSSES MAY OCCUR.
