April 23, 2021
De-Fi April Review
A review of the De-Fi scene in April 2021.
The decentralised revolution.
For people and organisations familiar with centralised organisations and centralised I.T. systems, the advent of decentraisation is comming as a considerable shock!
Decentralisation represents a revolution in the business and I.T. paragdim, which brings huge advantages in terms of business efficiency.
This section describes CyberTrade's take on the emerging decentralised finance (DeFi) landscape.
Click to enquire about investing: invest@CyberTrade.io
CyberTrade
1. Meet the 'Decentralised Autonomous Organisation' (DAO)
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A DAO is an organisation established and operated by computer code, which is controled by its member-owner community, without centralised leadership.
A DAO established on the blockchain is transparent, due to its transaction records being published on the blockchain. A DAO's program code is also maintained on the blockchain.
The net result is a largely automated organisation controlled and operated by remarkably few people. The relative 'lack of overheads' results in completely new levels of business efficiency.
Today, there are DAO's operating on the blockchain. One, in particular, (Uniswap) is responsible for $1bn+ worth of cryptocurrency trades per day, and employs fewer than 100 people, the majority of whom are developers.
Those developers are acting upon the decisions made by the member-community.
2. Meet the decentralised (Web3) ecosystem
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Today, there are about 20+ 'major' d(public) centralised networks (e.g. Bitcoin, Ethereum, Cardano, Solano, Polkadot, Avalanche, Stellar, Near, Cosmos etc). There are also numerous 'minor' networks and new 'emerging' networks
In addition, there are 50+ networks that are 'forks' of the Ethereum network. Invariably, such networks support the important 'Ethereum' Virtual Machine' (EVM) and can run the (Web3) decentralised applications (dApps) originally developed on the Ethereum network.
All such networks operate as 'Decentralised ledgers', meaning that they operate as 'peer-to-peer' systems, rather than as centralised systems. For example, unlike most current (Web2) systems, there is no central database and each network 'node' has its own copy of the database. Most networks are implemented using 'blockchains', but other implementations exist (e.g. IOTA's 'Tangle' decentralised ledger).
All of the decentralised networks support the running of dApp applications (e.g. exchanges, yield farms, staking apps etc).
Using 'bridging' it is possible for dApps, to operate 'across chain'
CyberTrade - Crypto Trading Services
CyberTrade
3. Meet the Decentralised (Web3) Application (dApp)
Respect for privacy / anonymity
Generally speaking, dApps do not ask users for personal information. Usually, an anonymous blockchain (wallet) address is the only 'id' information a dApp requires, to 'authenticate' and operate.
Non-Custodial
Unlike centralised financial applications, dApps generally do not take custody of investor funds. Therefore dApps swerve many of the 'regulations' and 'regulators' that are in place to govern organisations that are custodial in nature. This difference is the source of tremendous business efficiency and competitive advantage.
Decentralised Data Storage
If a particular dApp needs to store data, it invariably relies on decentralised file storage (e.g. IPFS) or decentralised data storage (e.g. Tabland) to ensure that data cannot be accessed/hacked at a central location.
The front-end of a dApp is generally a web application that runs across the full range of devices from phones to PC's. The back-end of a dApp is highly secure (money at stake) blockchain code (e.g. Ethereum 'Smart Contract'), that runs 'forever, on the blockchain', unless change is authorised by community - owner members.
CyberTrade
CyberTrade Consultancy
Handling a financial and technology revolution is not easy!
CyberTrade provides consultancy to enable people/organisations to understand the and successfully navigate the paradigm change from centralised to decentralised financial systems and applications.
For a given client situation, CyberTrade can perform business analysis and provide a solid business case (including cost estimate) that can be considered and actioned.
Once a DeFi project is approved, CyberTrade provides the detailed technical analysis, design, development and testing required to deliver a new DeFi dApp.
As the dApp reaches 'proof-of-concept' stage, CyberTrade can organise an Initial Coin Offering / Initial Token Offering, if required.
As the dApp reaches the 'test-net' stage, CyberTrade can provide launch and marketing services.
CyberTrade - Crypto Trading Services
dApp Application Design
Once the business analysis cost estimates and contractual arrangements are completed, the work of designing the dApp begins.
First, CyberTrade considers the (unseen) architectural design. Decisions made here regarding security, performance and scalability can make or break and IT application, but are especially important for blockchain applications, due to financial implications of failure.
Alpha yield is created by switching from a 'passive' / 'buy-and-hold' strategy to an 'active' trading strategy. Within Crypto, there are several reliable ways to create Alpha.
One way (not the only way) is to actively trade 'waves' occurring within price cycles.
In the typical (Elliot) wave pattern shown in the graphic, the profit (P) from active trading is produced from three 'long' trades (P1, P2, P3) plus profit from two 'short' trades (P4 and P5). Provided the moves can be anticipated, the Alpha profit is substantially greater than the buy-and-hold profit (X to Y).
The 'Alpha' amount substantially increases the profit, as compared with a passive buy-and-hold strategy, thereby accelerating capital growth, regardless of market direction.
Within Crypto there are several other ways of creating alpha yield, including yield farming, flash loan arbitrage etc. Also, automated trading services may use a moderate amount of leverage and perform short trades, to gain advantage.
The solution
Automated trading, Alpha Yield and Capital Growth
Alpha yield is created by switching from a 'passive' / 'buy-and-hold' strategy to an 'active' trading strategy. Within Crypto, there are several reliable ways to create Alpha.
One way (not the only way) is to actively trade 'waves' occurring within price cycles.
In the typical (Elliot) wave pattern shown in the graphic, the profit (P) from active trading is produced from three 'long' trades (P1, P2, P3) plus profit from two 'short' trades (P4 and P5). Provided the moves can be anticipated, the Alpha profit is substantially greater than the buy-and-hold profit (X to Y).
The 'Alpha' amount substantially increases the profit, as compared with a passive buy-and-hold strategy, thereby accelerating capital growth, regardless of market direction.
Within Crypto there are several other ways of creating alpha yield, including yield farming, flash loan arbitrage etc. Also, automated trading services may use a moderate amount of leverage and perform short trades, to gain advantage.
CyberTrade - Exchanges and Trading Instruments
The cryptocurrency world encompasses a rapidly expanding range of over 500 Spot and Derivative Crypto Exchanges, implemented using either Centralised or De-Centralised architectures. as of May 2021, the combined trading volume exceeded $200 billion per 24 hours.
The CyberTrade approach is to be 'exchange independent' and therefore at liberty to utilise any crypto exchange that offers a large trader/investor community and/or valuable trading instruments.
In theory, CyberTrade has access to all crypto exchanges. However, In practice, CyberTrade will
- Non-Custodial trading / Trader retains control of funds
- Currency Pair Trading - Short/Long (with leverage), - Arbitrage, DeFi Flash Loan Arbitrage,
- Index Trading, Options / Futures / Perpetual / Market Making
- DeFi Yield Farming, Crypto Commodity Trading, Crypto Forex Trading
CyberTrade - Crypto Trading Services
Typical
Trading Service
/ Smart Contract.
Within the Crypto Decentralised Finance' sector DeFi trading services (aka Recipes or Lego blocks) can be implemented as 'smart contracts'. These are usually Solidity / Ethereum computer programs comprising of a number of trading steps (say, 4 to 20 steps), often executed 'atomically' (In a batch).
Example: In a Flash Arbitrage, all steps are executed atomically. Amazingly, the trade(s) are executed only if there is a profit available. If a profit is not available the execution is cancelled.
In general, most 'smart contracts' contain the following ingredients:-
1. One or more Exchanges
2. A Stake or a loan
3. Leverage
4. Trading Instrument(s) (Arbitrage, Currency Pair etc)
Utilising 'composability', combinations of ingredients, are used in trading recipes to produce the desired results. The smart contracts run, on the Blockchain and execute steps / trades at each required Exchange.
Competition to CyberTrade.
Currently, there are a handful of automated crypto trading systems available on the emerging crypto market. The systems fall into two categories:
a) Systems designed for hedge funds (Requires expert-level trading knowledge)
b) Systems designed for retail traders (Requires intermediate-level trading knowledge)
Both categories provide above average returns but require a good level of trading knowledge. This limits adoption to less than 5% of all crypto investors.
CyberTrade has a completely different approach. A central design and development studio, launching a series of projects, each implementing an essential trading instrument, utilising a decentralised architecture.
Each trading instrument is fully automated, suitable for a mass market, by requiring zero trading knowledge.
The automated trading services are downloaded to a mobile phone and controlled (Start / Stop / Deposit / Withdraw) from the (decentralised) dApp..
CyberTrade - Crypto Trading Services
Revenue Streams & Governance.
Depending upon the nature of each trading service, CyberTrade and its equity investors have several possible revenue streams:-
1. Share of revenues generated from trading fees paid by end-user customers using each trading service on a day-to-day basis.
2. Profit sharing between the end user customer and the equity investors.
3. Share of any monthly subscription required by applicable trading services.
All in all, it will be the province of each trading service governance panel (CyberTrade plus the other equity investors) to manage the revenue model.
CyberTrade shall provide a governance model so that each trading service can be governed in an efficient and democratic way.
High customer growth by removing barriers and sharing profits.
To encourage high customer adoption of trading services, CyberTrade proposes to operate a SaaS pricing model having low/no up-front barriers to entry to the ecosystem:-
Mass Adoption will be encouraged via the following mechanisms.
a) Mobile phone application download.
b) Entry via a 'freemium' / 'trial' levels of entry.
b) Layered upgrades based on more advanced trading instruments
c) CyberTrade / User - Profit Sharing
b) Payment-by-results for trading services / app developers.
c) Low/No administration costs due to automation) Crypto Investor and CyberTrade interests are 100% aligned via trading profits.
CyberTrade - Crypto Trading Services
CyberTrade
User & Revenue Growth
CyberTrade services may be used in both Retail and Financial Institution markets.
In the retail market, CyberTrade expects that the number of crypto investors using the trading services will grow as illustrated in the graphic.
In the Financial Institution market, the number of customers will be relatively small, but the funds invested will be relatively large.
CyberTrade
Customer Milestones.
Q2 2022- First Trading service and Token Offering
Q3 2022- Second Trading service and Token Offering
Q43 2022- Third Trading service and Token Offering
Customer Milestones
(Based upon current Blockchain CAGR = 50% per year)
(Measured in months of continuous trading operations):
12 months - Revenue $1m +
24 months - Revenue $1.5m +
36 months - Revenue $2.25m +
48 months - Revenue $3.4m +
60 months - Revenue $4.21m +
CyberTrade - Crypto Trading Services
problem
The majority of new crypto investors lack formal training and solid trading experience. This results in 75% of them losing substantial amounts of money in their first year of trading.
solution
Crypto investors can utilise Yield producing trading services, which use automation and Artificial Intelligence to perform trades like a trained and experienced professional trader.
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opportunity
The existence of a real need and genuine CyberTrade solutions, provides a good investment opportunity. Tokens bought for cents can be expected to be worth dollars as the company grows..
