Executive Summary- Why Smarter than Crypto?
SMARTER THAN CRYPTO (“STC”) is the world’s first cryptocurrency-only SMARTER THAN BETA tokenized portfolio, and aims to provide a solution to this problem. The portfolio will autonomously maintain a diverse portfolio of up to the top 20 cryptocurrencies by market capitalization. The SMARTER THAN BETA strategy can outperform any index in any asset class by 40% more return and 40% less risk. In order to continue to have an efficient portfolio in regards to return and risk over time, SMARTER THAN CRYPTO’s asset portfolio is adjusted regularly in a process called rebalancing.
RATIONALE BEHIND A SMARTER THAN CRYPTO STRATEGY
Index tracker funds and SMART BETA strategies have seen exponential growth among investors since the first index mutual fund was launched in 1976. This has proven to be a successful form of investment as the low-cost involved has allowed index funds to outperform the majority of active managers across market and asset styles.Due to their low fees and enhanced index strategies Salus Alpha’s SMARTER THAN BETA strategies consistently outperform their benchmark index. The odds of picking a long term winning cryptocurrency by investors themselves are very low: studies show that regardless of past performance, future performance is virtually random and in the period February 2014 till January 2015 Bitcoin lost over 80% of its value.
Reasons for Choosing the Ethereum Blockchain:
– Security and predictability (as opposed to, for example, having to run a separate blockchain),
– Use of robust and well-supported clients (Ethereum based tokens can be managed with official Ethereum clients),
– High liquidity (transferable for ether),
– Ethereum smart contracts enable a very transparent way of offering a liquidation option.
The number of coins seem to be correlated to the portfolio’s return and risk. The number of outperformance and risk is substantially higher for 30-40 coins selected when compared to the alternatives above. However since risk doubles moving from 20 to 30 or from 20 to 40 coins. They select 20 coins as the optimum portfolio size as this seem to be the sweet spot harvesting the returns under “acceptable” risk.
SECURITY & TRANSPARENCY
SMARTER THAN CRYPTO has implemented security industry best practices for defense against Sybil attacks and bad actors in co-operation with their team of expert advisors. Strong identity verification and authentication procedures are in place to ensure secure operations. Transparency in SMARTER THAN CRYPTO’s trading activities and current holdings will be ensured through the use of view-only exchange APIs as well as through proof of reserve for non-exchange wallets (this includes both hot and cold wallets).
There will be no token creation, minting or mining after the ICO period. Tokens will be transferable and tradable once the ICO is successfully completed and the underlying assets have been acquired. Investment can be made in ETH, BTC or LTC.
– 8.5% SMARTER THAN CRYPTO Team;
– 1.5% Marketing and Investor Relations;
– 1.5% Operations;
– 0.5% Advisors;
– 1.0% Bounty Program;
– 87% ICO Participants;
The SMARTER THAN CRYPTO team tokens will vest over two years to ensure that team incentives are aligned with ICO participants.