A Cryptoasset Index Fund on Bitshares
Here we have discussed passive vs. active investing before. Let us revisit the idea with a practical approach to applying active and passive strategies within the cryptographic asset ecosystem (including of course, steem). Our first and final step in this investigation would lead us to conclude the majority of cryptoasset holders are active investors - individuals who trade several times/week at least. An informal Twitter study revealed that many in crypto are frequent traders -- 
After investigating some of the options for passive crypto portfolios I was surprised to learn that there are few serious options. Think about that. $375 billion in nominal valuation (https://coincap.io/) as of today and not one reliable way to deploy passive investing strategies at scale?
It is worth noting that users of bitshares and steem have benefitted from stable options for years. Despite this, stable coins in general have yet to have much success across the general cryptosphere. If you are an early adopter of either of these Graphene based chains (and if you have used them at all yes you qualify as an early adopter relative to the world population) then offer yourself a pat on the bank.
For the rest... Make no mistake, the herd is coming. The mythological financial institutions, perpetually cited as being around the corner and exuberant in their desire to implement digital assets and blockchain technology. They may finally get involved when simple problems like passive strategies and stable assets are supported at scale. Still for now the most significant institutions remain on the sidelines.
Within the crypto space there are numerous projects that have gained hundreds of millions USD in investment to build stable coin protocols; especially on Ethereum. A solution for both financial institutions and Mom-and-Pop will win the day. In my research I have found such a solution. Twentix.
First, some bitshares history. In 2015, a smartcoin on the bitshares platform was released called Bit20 (BTWTY). This token was pegged to track the value of the top 20 cryptoassets (measured by market cap). If you are familiar with how bitshares smartcoins function you likely know what happened next. While the BTWTY smart contract operates autonomously there is one Achilles heel. It is imperative that community members keep this fact in mind. The weakness (and greatest strength) of bitshares smartcoins is that the smart contracts themselves refer to a collateral pool funded with bitshares. If bitshares consistently falls relative to the specific asset price feed then that particular smartcoin is probably heading for global settlement.
Global settlement. Clearly, when the collateral of bts smartcoins deteriorates siginificantly the market is in trouble. This happened to BTWTY. Take a look at the top coins on the first day of the BTWTY index – http://www.twentix.info/bit20.php?&page=bit20. Bitshares was the sixth largest coin by market cap. Today it is in the 30s. This simple fact is all I need to know and understand why global settlement occurred. Bitshares’ drop out of the top 20 was a critical moment for all indexes collateralized by bts. It changed the mathematics in a way this author finds very beneficial for the future of the index coin on bitshares.
A creative solution. Twentix embodies the same ideas of the earlier Bit20. The most notable difference is the decimal – each twentix unit represents a much smaller fraction of the value of Bit20. Each twentix trades for about $1.50 USD. Yes that means twentix is accessible to every portfolio. Look out for more updates on Twentix and the cool projects and partnerships DaoStreet has organized. We are here to learn from each other. Please share any thoughts/concerns/questions in the comments below.
This is not financial or legal advice. There are risks associated with any activity including cryptoassets. The best investment to make when beginning is investing time in learning about the technology. This knowledge will reward more consistent dividends throughout life. Learn more about twentix at http://www.twentix.info/
I'm curious of what your outlook on Twentix would look like if bts were to make strides back into the top twenty. Obviously this can be seen as a positive for those taking positions currently, but I think that bts popping in and out of the top twenty could pose a few issues. What's your feeling on this?
At the moment bts is outside of the top 20 coins. This increases the heterogeneity of the overall smartcoin position and strengthens it against global settlement. Because the collateral and liability have lower correlation when bts is outside of the top 20 twentix should exhibit more characteristics of antifragility.
If bts were to return to the top 20 then the correlation between the collateral and liabilities would increase. This would increase the degree of fragility for the system. But as with all complex markets, effects are not easily predicted at the outset. That is why markets are so engaging!
@jhon-robert Do you think if the price increases then everyone will benefit?? But If it is beneficial to all, then why does it drop and grow again and again?? What is your felling this tropic??
If price of general cryptos increase this will benefit holders of twentix. you can see all the coins twentix is dependent on @ twentix.info
John, an absolute beast of a post, great! What I like most about this article, is it not only exposes an interesting index people may have yet to check out, also the story behind it and how decimal places work when issuing a coin in the Token Factory. If you create a token (UIA or Smartcoin) with too few of decimal places and it has a very high value (possible especially if also issued/set to limited supply), the lowest possible fee is dictated by how many decimals.
EXAMPLE: 0.0001 fee versus 0.00001 fee (4 versus 5 decimals)
if coin is worth $15,000
= $1.50 vs $0.15 !
Yes it is a truly interesting background. This is an excellent opportunity to show the latent potential in the bitshares platform.
Exactly, and I know there are others we are yet to discover or dive into still. And new ones coming all the while ...
Really good explained @john-robert! I will take a deeper look at twentix soon...
I guess the only thing I don't like about twentix is that it has some coins I'm not a big fan of like BCH. Definitely thinking about getting into this still, I haven't made any trades in a while but have been thinking I should lately. My only problem is time to commit to trading and learning it, so something like twentix seems like a great option, I guess I'd just like to see more like it where people are adding in low Mcap gems and coins outside the top 50 at smaller percentages
The beauty is that twentix is only the beginning. It is the concept that can be applied to many particular uses. For the examples you brought up -- I could absolutely see a copy of twentix launched by people who don't think bitcoin cash and ripple should weigh in the valuation. The principle of an index can satisfy both with two different applications.
I appreciate how twentix keeps in bch because it removes my personal bias against projects I do not like. That is the idea of passive investing after all.
Okay first things first............... I remember your post in the beginning of this month where you compared active versus passive trading. That post is really relevant to the first half of this post and I would like to mention it here (since if anybody who has no idea what active trading is, then they can take a look at that post)
Coming to the main topic - Majority of crypto assets have Bought and HODL'ed. Still there is a small portion that I like to keep open for daily/weekly trading. This amount is not very large and I can afford to take risks with it. The reason I do this is because I found that day trading is one of the most effective ways of keeping in touch with the heart of the market and it challenges me to keep up my pace.
I am by no means an early investor as I cam onto the scene in 2017 but I have read a little about BitShares and I have always liked the idea. Although people don't talk about it as much but it is by no means outdated and any coin build by improving on that idea could potentially hold a chance to outrank it's competitors fairly quickly.
You recognize the value of bts.
The investing strategy you described applies both active and passive strategies. This is perhaps the most effective way to invest in crypto. It diversifies itself! But would you comment on the amount of time you dedicate to the active trading side of your portfolio? It is my understanding that many many people are not interested in devoting much time to their investments and a pure passive strategy accommodates them well.
My usual active time is concentrated around the weekend. Saturday to Monday. On an average I spend around an hour daily, actively buying and selling. Apart from this even more time goes in to looking into the stats and charts and following the MACD of even my HODL'ed coins.
For past couple of weeks I have been researching into Bullion to diversify my own portfolio and my Parents as well. In the end I would say that in the past few months I have dedicated a significant amount of time on following the markets as I hope to one day turn this into a full time occupation.
.........and thus my troubles with catching up on my reading ;-)
Very cool man. I also am a fan of bullion for a diversified portfolio.
How would you like to use your time and talents in this space? You clearly express yourself well and are an engaging conversationalist here on steemit.
It's the same staff behind the two index. Twentix is the little brother. And ripple isn't inside the two... Bit20 is now to expansive so they create twentix. After each month the new top 20 is created.
You are correct about xrp. Thanks for sharing.
Looks good. If I actually understood it, I could actually be there and get something of use from it.
I think Twentix is similar to Bit20 index ?
good post and useful for everyone who work in the field of oline @john-robert
I don't like about twentix is that it has some coins I'm not a big fan of like BCH.I am by no means an early investor as I cam onto the scene in 2017 but I have read a little about BitShares and I have always liked the idea.
So, you are half @jackeybrown and half @hashcash ...It is not good to copy and paste other people's opinions just to get an upvote. Shame on you. I hope @john-robert notice it...
Yes I did copy paste because i liked these opinion but It is highly true that i donot comment on his post only for upvote. Because If I did comment only for upvote maybe I didnot comment comment in his post anyway because he is not upvoting me for long time. you can cheak my profile I only comment his post more and more but not for only upvote because i like his post. If I donot know about his tropic I notice him. See on this scene shoot here is the proof. But I think @jhon-robert know about my comment. Because specially he is following me for my comment which was told me by him in a comment also. but I know I am new in the steemit I cannot post that post which is comfortable because my mother language is not English. But I always try to my level best to understand his post and answer him. If u want all poof what I said u can cheak my comment there is nothing to lie my dear brother.
Now it is depending on @jhon-robert if he tell me to comment on his post I will do. But from now I will not comment on his post until he is saying me to continuous my comment. So, it will depend on him. I know he supported u for that u got an upvote. If he tell me I will not comment on his post after this comment. @jhon-robert please I hope u will say something about it to me. thank a lot for the comment dear brother.
You are welcome to post. If you quote another's statements then tag them like this: @john-robert.
But I think most people are interested in your own unique thoughts on the matter at hand.
I have understanded but I think you know about my post. I just use that because I liked that. But I donot comment in your post for only upvote. You know that I hope. But I think he is wrong because If I comment only for upvote I can post my own statement like before that you had upvoted. thanks for the information.