When we launched our new RialtoTrade.com platform we based our algorithm fee structure on the Bitcoin value of the marketmaking basket of assets.
As it happens, the launch of our new platform roughly coincided with the start of the 2019 bull market, which caused the Bitcoin value of the 12 different assets, which include significant amounts of fiat currencies, within the marketmaking basket to lag behind Bitcoin regardless of the profit that the algorithm was producing.
A lot of our users were confused by this and complained about the apparent loss generated by the algorithm due to how we were measuring the performance of the algorithm. It also exposed the complex set of influences on the total basket value and therefore the fee charged by the algorithm.
Based on this realization we changed how we display the value of our products on the platform from Bitcoin based to USD based and now we will also be changing how we charge the fees.
The simple fact is that the crypto market is extremely volatile and unpredictable so the only fair way to charge a performance fee is to base it on the daily profit generated by the algorithm.
This way we don’t charge a fee if the Bitcoin value of the marketmaking assets goes up on its own based on exchange rate fluctuations that have nothing to do with the algorithm, but at the same time we do charge a fee on the value that our algorithm adds into the basket.
We are keeping the fee at 20%, so with the next investment cycle, starting on 15th July 2019, the 20% fee will be charged on the daily profit basis.
For example, if the algorithm generates 1 BTC of profit on a particular day, we will charge a fee of 0.2 BTC with 0.8 BTC being distributed among the investors in the algorithm. For compounding effect it’s important to note that the entire profit will be reinvested back into the algorithm until it is withdrawn.
This change will affect very few of our current users, since most of them are our crowd-sale supporters and have therefore received a Premium account which is exempt from paying the performance fee, which will continue to be the case after this change.
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