How crypto asset baskets will work on our new platform
Crypto asset baskets (formerly referred to as CTIs) are one of the two new product categories that will launch with the introduction of our new platform. They are an important innovation that will help bring more users into the crypto ecosystem, as it will greatly simplify the selection and purchase of crypto assets.
Crypto asset baskets will offer passive long term crypto market exposure by easily selecting and purchasing your favorite theme with one click. In this article we will take a closer look at our crypto asset baskets and how they will work on our new platform.
At launch we will have four simple baskets to choose from and will then regularly add more diverse and sophisticated options. These four will all be equally-weighted sets of five assets with each set representing a different ‘theme’ of assets, classified by the main use case that those assets have in common. Each basket will be automatically rebalanced each month to maintain the equally weighted asset holdings.
Our first basket of five assets, will contain the top five coins by market cap. The second one, ‘Decentralized Applications Basket’, will be representing decentralised application (DAPP) platforms, such as Ethereum and NEO. The third one, ‘Blockchain Payments’, will be comprised of five assets aiming to provide financial payment solutions, with the most representative examples being Ripple and Stellar Lumens, while the fourth basket ‘Privacy’ will contain five coins that focus on the anonymity of their transactions (like Monero and Dash).
Apart from the assets’ main use case, the selection rules will consider:
- Their market capitalisation (the higher, the better)
- Possible security issues (recent breaches)
- Past market performance
- Activity on the project
The technical process
Users will deposit bitcoin (BTC) to our platform and select their preferred basket or a combination thereof. Our algorithm will automatically purchase the corresponding amounts of crypto assets and deliver them into the storage wallets. A lot of emphasis is given on the correct calculation of weights, so that the basket structure will remain unchanged during the rebalancing process.
The assets will be stored in cold or multi signature wallets and kept safely until the user requests a withdrawal. For transparency, the blockchain addresses of assets where this is possible will be made public so that users will be able to monitor any activity on them. Withdrawal requests from crypto asset baskets will be processed in Bitcoin on the 15th of each month and transferred to users’ wallets within three days.
After the withdrawals are completed, the monthly rebalancing of fund’s assets will take place. The aim of rebalancing is to restore initial weights of each crypto asset basket, as the ratio of values of assets in the basket will vary when the prices change. Selection and weights of assets in the basket may change at this point, according to the rebalancing and selection rules that are designed to ensure the optimal crypto market exposure. Those rules will be published on each crypto asset basket page and will be used to evaluate major changes of the assets’ fundamentals. The basket structure will have a tendency to remain stable if no important events occur.
Why should you use Rialto’s Crypto Asset Baskets
Crypto markets can be extremely turbulent and oftentimes defy much of the logic, which governs the traditional financial markets. Successful participation in the crypto markets demands constant engagement, which can be quite taxing on the casual and sometimes even seasoned investor.
With our Rialto crypto asset baskets you get the peace of mind of knowing that your long term crypto investments are well researched, actively monitored and safely protected. Our baskets are designed for passive holders who wouldn’t like to pass on the opportunity that the crypto-markets offer, but recognise the very real challenges that they bring.
With the purchase of Rialto crypto asset baskets you don’t only free yourself from the constant stress of monitoring the markets, but also benefit from having the diversified and themed based exposure to crypto markets as well as someone looking after the security of your assets, while providing you with the full transparency that the blockchain offers.
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