Before I start, I would like to apologize to those who prefer the conventional essay/thesis style forum posts over the more conversational piece that is about to follow. At the age of 18, I found myself not at university but working at a bank. The last time I practiced essay writing, therefore, coincided with something equally important at the time; staring at a Nokia 3210 trying to beat every else’s best score on Snake.
The recent BED launch has provided much inspiration about how I am currently thinking about products. Mainly; which ones should I invest in and how much? Is a 33/33/33 BTC/ETH/DPI split right for me? Do I ignore the rekage of my previous attempts to LP profitably and ape into the ETH:BED v3? Or wait for it… it gets worse… continue to NOT manage my portfolio in any strategic way whatsoever, randomly dipping in and out of my BTC/ETH stash to buy and sell things I saw a random cartoon frog on Twitter memeing about last week.
So, after doxing myself as someone with a tradfi history and (hopefully) a defi future as someone who can’t even manage their own money, I have a question for you guys. Who amongst us rebalances their portfolio every month? Who avoids the degen on their shoulders and sticks to the game plan? Not touching their core holdings, DCA’ing, and generally managing risk?
Realizing I have a problem strategically managing my core portfolio, combined with the recent “BEDspiration” I’ve realized something. @thomashepner recently described not having LINK in our lineup as the “800-pound gorilla in the room”. And yet, before BED, we have made no inroads into managing the ~1 trillion dollar combined supermassive blackhole assets of which we orbit.
There’s no way to sex this up so I’m just going to say it…
A monthly rebalancing, market cap weighted, wBTC / ETH (72 / 28% @ 26th July 2021) index.
Weirdly as far as I can tell it just doesn’t exist. Not on Balancer, not sets v1. Nowhere. Is it so simple it’s been overlooked? You could LP it sure. But then you are selling the winner. Not that Balancer offer a monthly rebalancing pool anyway. Maybe you’re an ETH maxi and don’t care for BTC. Me? Personally? I’d like the hedge. Just without the faff.
I can’t help but think… How many people think and feel the same? Or should I say like me don’t think about it at all but would benefit from such a product?
Maybe keeping your whole BTC stash off the ETH chain is better risk management? Fair.
We have BED. Why need this? Also fair. But BED doesn’t solve my fixed weighting issue.
An extract from Hacking Growth by Sean Ellis & Morgan Brown…
“growth hacking isn’t just about how to get new customers. It’s about how to engage, activate, and win them over so they keep coming back for more. It’s about how to adapt nimbly to their ever-changing needs and desires and turn them not only into a growing source of revenue, but also passionate ambassadors and an engine of word-of-mouth growth for your brand and products.”
To me, the meaning of being the “BlackRock of crypto” means just that. Being the all dominant market behemoth. This isn’t a dig but to be clear, BlackRock is no small line-up boutique asset manager. To me, they are a warehouse. 3,500+ Products with almost every type of investment solution any investor could need. As our user base grows so too will our responsibility to cater to their increasing variety of needs and wants. Maybe not right now at this stage in the adoption cycle, but in the not too distant future, our customers will be far from a homogenous group. We have already embarked on some of these important distinctions. $BED is our new market-entrant friendly product. $DPI and $MVI, our simple buy-and-hold type investment solutions. The $FLI suit, our solution for traders and more complex investors.
In the same way Apple doesn’t just sell one iPhone. (Big, small, high-end, value & in-between. Not to mention a range of colours.) We too should offer a wide (as is sensible) selection of products to engage and activate our user base. To do so we will need to evolve and transcend our current boundaries over time. A handy Snake 2 metaphor if ever there was one.
TBD. Here are my thoughts on 2 approaches:
- 0bps - My inner socialist says such an index is cheap to make, inexpensive to maintain (liquidity provisions aside for now), and could arguably be a public good or perhaps even a slightly loss-leading product that promotes our brand bringing people into our ecosystem.
- 1,3,5, or 10bps - My inner Ayn Rand says it is a service after all and it’s only fair we are compensated accordingly. The large tradfi ETFs charge ~20bps. Recent DPI “persona” interviews by GWG indicate users are fee-insensitive.
- BEI: The obvious one. But. I already hate it. It’s literally two letters short of Beige.
- EBI: Bit better but still… Meh… Also currently BTC>ETH
- SMBHI: Super Massive Black Hole Index. Will likely only appeal to interstellar fans. (No bad thing obviously) Also jk, jk
- CORE: My personal fav. (Clashes with another ticker)
- That’s it. I’ve spent all my creativity on snake metaphors. Please help!
Iterations and further ideas for thought
- Obvious one first. A productive version. A risk “tranche” style range of ib/a/c/wBTC, st/c/aETH etc (See PAY for inspiration)
- A bit left field admittedly here… Countercyclical. (28 / 72% BTC / ETH)
- FLI 2x?
Thanks to all who have made it this far. Looking forward to hearing everybody’s thoughts and ideas.