Other popular things include investment in crypto stocks – the fractions of Bitcoin and other cryptocurrencies listed and purchasable via the stock market. Not only do they hold a promise of reducing risk, but also opening the door to crypto-sceptics who are now able to supplement their portfolio with no direct exposure to the underlying asset. The synergy between the stock market and crypto becomes increasingly appealing, not only for the sake of higher returns (some of which have already brought +4442.78% from the listing date) but also the chance of being hedged against volatility.
The cryptocurrency field also becomes more regulated. That said, if previously the investors could lurk their trading profits behind the scene, nowadays the disclosure became a compulsory step for participation in the economic system. Some of the regulated alternative banks, such as Revolut, have been expanding their investment portfolio to include a broader range of cryptocurrencies – currently about 40 – ending up calling 2021 ‘the year of crypto’. That all suggests that interest towards crypto, despite its outraging volatility, is not going to fade out in the near-coming future.
Looking for someone to share expert insight on the topic of crypto investing, I came across Raiden, the CEO of YDragon. In the course of our talk, I will try to uncover the underlying mechanisms of crypto portfolio investing, find an answer to what makes a crypto investment successful, and at the same time reveal more about the project itself.
These include public companies and pension funds who are used to having the tools necessary to mitigate all sorts of investment risk. The crypto space currently isn’t mature enough to offer such tools, as most risk mitigation strategies are imported directly from the traditional finance world and rely on asset and fund managers to sift through the thousands of cryptocurrency projects around today, to be able to offer investors a sensible investment strategy.
We want to change that by using a combination of investor expertise to make initial decisions about the composition of a basket of assets, and smart contract convenience to maintain asset balancing and adapt to asset changes. Such an approach will not only be key in attracting and maintaining big money, but will be a welcome relief to retail investors who for the most part navigate the fields of crypto without the tools that institutions have imported.
While that may hold true for the foreseeable future, the fact remains that crypto assets are inherently more volatile due to lower liquidity spread out over different blockchains and exchanges, as well as being represented by a greater proportion of low market cap assets.
That, coupled with the lack of diversification tools available to the average investor, make for a very risky environment for anyone looking to park their hard-earned money and not think about it for a few years. This is precisely what YDragon aims to do: offer crypto investors of all walks of life the tools to minimize volatility and risk.
Warren Buffett is often quoted saying “diversification is a protection against ignorance.” Due to the volatile and ever-evolving nature of crypto, it makes very little sense to chase after trends – in all likelihood by the time you hear about it all the alpha has been sapped out of it. Just buy a little bit of as much as possible. We’ll make sure you get to do that as easily as possible.
Over time we will be rolling out more and more indexes to capture all kinds of niches in the crypto space, giving investors the opportunity to diversify even more. These could be indexes representing the best of all kinds of blockchain networks such as Avalanche, Matic, Cardano, Polkadot, Solana, Algorand, Ethereum. These could be indexes representing different segments of the market such as the best in NFTs, gaming, exchange tokens, privacy coins, storage, oracle projects, derivatives, sports, gambling, analytics.
These could be indexes representing different market capitalizations, short-term niches, algorithmic stable coin projects. The possibilities are endless and our protocol will allow for the constant rollout of new opportunities for diversification.
But while that sounds great for the richest of the rich, for users that can only buy a few dollars of every asset these fees can represent a high percentage of losses that they need to make up for with return. Not only that, but a knowledgeable and diligent user wanting to keep a balanced portfolio will have to constantly shift assets around, paying fees along the way.
What the YDragon protocol does is optimize costs by pooling together funds from thousands of different users into one or fewer transactions, resulting in a much lower average cost to the user. Portfolio balances are also done in bulk. For a user wanting to participate in diversified investing, our YDragon indexes will have no competition.
On the utility side, the YDR token will be the only asset that will be present in every index, in addition to rewarding holders from every reward-generation channel that we have in the ecosystem. What this means is that the more indexes we operate with, the more YDR holders will benefit. Over time it will capture value from everything that we do at YDragon.
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Source: Cryptocurrency - investing.com
