I was thinking about portfolio rebalancing and I got an idea for a coin that users could deposit a handful of different coins to provide liquidity to the platform but in doing so you could setup a portfolio of those different coins and select how you want to keep the portfolio balanced and how often it should rebalance and the AMM could do this automatically, but once you deposit your coins into the liquidity pool and select the how you want it to be balanced, it would mint new tokens to represent your auto balancing portfolio. Users could select how many tokens should be minted to represent that certain portfolio. This would allow people to just hold one token that would represent a whole basket of coins that is optimized for certain market movements. It could be weighted high risk, low risk, stable or whatever your appetite is. This would be so cool and could allow for tax efficient rebalancing because holders are only holding one coin that in the background is being automatically rebalanced to represent a basket that ideally would be growing in crypto value as well as fiat value.
Idea for a new type of coin
That’s very similar to the idea I suggested before, and I am all for it.
I believe I mentioned this in the past, but there is something called https://www.tokensets.com/ which allow you to automatically manage and re-balance crypto portfolios. It could be useful for automating something like this.
I’m suggesting personalized weighted portfolio structure. Newly minted coins would represent the new personalized weighted portfolio and if others like the structure of a certain portfolio structer they could mint more of that coin by sending payment to a smart contract which would automatically use that to buy more of the coins weighted in the portfolio and spitting out more of that coin.
Say I want a structure that is like this:
50% BTC
20% ETH
10% USDC
5% PRV
5% BNB
5% ADA
5% NEO
I select how often I want this to rebalance and when.
I select how many coins should be minthed that would represent 100% of this portfolio. So for the sake of this example I’ll make it 100 tokens to represent the portfolio.
I send my payment (say $1000 of whatever crypto) that would be the amount I want weighted in this structure.
The contract then mints 100 coins to represent my portfolio and I’ll just call them BRAK tokens.
Now say somebody else likes the structure of my portfolio and would like to get exposure to the risk of my portfolio.
They could send their funds (say $500 of whatever crypto) to the same smart contract and the contract automatically converts that into the correct ratios of coins and then spits out 50 of the BRAK tokens to their wallet.
This could even have an incentive structure for people to get paid for the popularity of their portfolio by where when somebody mints mor BRAK tokens I would receive a small percentage of the newly minted BRAK tokens.
This is exactly how set tokens work. Users have a portfolio that they can set to automatically re-balance if they wish, or you can follow somebody else’s portfolio and the owner gets a small percent.
Set Tokens use the ERC-20 Standard and I believe can be implemented into Incognito. However, I haven’t tried it yet. All we would need to do is allow liquidity providing for this type of asset.
Neat idea!
Do you have vision how to make it possible from technical perspective ?
Unfortunately I have no knowledge of coding or anything in that arena. I think of myself as an idea guy. I would love to see this though.
After checking out token sets that Revolve above mentioned it seems like exactly what I am envisioning. Maybe an integration with them or a partnership of sorts would be a great place to start? I can try reaching out to them but nobody I’ve reached out to ever responds back. I think a team member would have more luck.
It’t like curve.fi does when you add liquidity?
For reference: https://medium.com/@crypto.tutorials/curve-fi-how-does-it-work-b673a8fe16cc
I have no idea what that is and upon looking at the link you gave I’m not sure how it’s like what I’m talking about.