Fund allocation settings and AI profit explained

in crypto •  9 months ago  (edited)


In this quick update article we will explain how your funds are allocated between algorithms based on your percentage settings in the user dashboard and why you were seeing zero on your AI profit chart despite the AI bot loss?

How your funds are allocated between MM/ARB and AI Bot

During the most recent active trading period between 3rd and 16th September 2018 our algorithms returned the following results:

MM/ARB bot: +0.509% (in ETH terms)
AI bot: -1.28% (in USD terms)

For comparison, during the same period BTC lost -11% and ETH lost -25% in USD terms.

Because of the large drop in USD value of crypto assets the USD value of DAP assets depreciated very significantly during the latest active period, whereas AI assets depreciated by only 1.23% in USD terms.

If you were 100% in MM/ARB or AI during that period this wouldn't have made any difference for you, however if you were split between the two, this has had a significant effect on how your assets were distributed between our algorithms for the current trading period.

The percentage of investment is calculated from the total USD value of all your platform assets, at the end of the trading period.

The best way to explain this is by example.

Let's say you had $10,000 worth of assets on our platform at the start of the previous period and you set your investment as 80% MM/ARB and 20% AI. This meant that you invested $8,000 (estimated USD value of DAP assets) in our MM/ARB algorithm and $2,000 in our AI Bot algorithm.

Then let's say crypto has a bad couple of weeks and MM/ARB assets lose 10% of their USD value due to BTC, ETH and other DAP assets dropping this much against the USD during the trading period, while AI assets, which use USD as the base currency, stay the same.

We will ignore any trading profit/loss in this example as it wouldn't significantly affect the numbers, given that it is mostly in the range of +/-0.5-1.5% per trading period.

At the end of the trading period you would have $7,200 in MM/ARB assets (estimated USD value of your DAP assets) and $2,000 in AI assets with the same 80:20 split for the next period.

Going into the next period, you would then have a total of $9,200 split 80:20 between MM/ARB and AI algorithms; in this case $7,360 would be going into MM/ARB and $1,840 would be going into AI.

Why were you seeing 0 on the AI profit chart despite the -1.28% loss

Because AI uses USD as the base currency the ETH denominated loss was presented as zero on the profit chart. This was different from how we represented a similar AI loss previously and we understand that this was confusing, therefore we have now changed it back to negative ETH again.

This is not accurate though as AI loss will not reduce the amount of ETH profit you made on MM/ARB, you will simply have less USD in your AI account. The total for the period will therefore be subject to correct interpretation, but it will be better representative of the total profit/loss denominated in ETH for the relevant period.

The introduction of the AI bot has had some unintended consequences on the current platform and we apologize for that. The good news is that the development of our new platform is going well and we are on track to launch on time in Q4 of this year as planned.

Before you go

More details about our new platform will be published weekly as we approach the launch, so be sure to follow us on our social media channels linked below to stay up to date with all the latest developments.

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