Alphr.Finance

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Introducing Alphr.Finance

Alphr is a decentralized social trading platform.

We have seen many successful efforts to automate yield farming. You can deposit your funds into permissionless non custodial solutions that will find the best yield. What if you could do the same to find the best trades?

Vision:

Alphr enables anyone to trade with the alpha of the most successful investors in crypto.


Buy when they buy, sell when they sell.

Alphr uses AMT (automated mirror trading) to mirror the trades of the most successful wallets based on historic returns.

Users can select from a plethora of the most successful crypto traders to mirror, based on their wallet DEX trade history. When a user selects a wallet to mirror, they then deposit funds into a smart contract pool and that routing smart contract will mirror all the trades of the selected investor wallet. Users can search any wallet and if a pool doesn’t exist a mirror pool can be created by the user.

Alphr can save users considerable gas fees by achieving economies of scale, due to funds being routed together a single transaction.


What problems does Alphr solve?

1) Gas fees — High fees have put DeFi and Dex trading out of the reach of many smaller investors. Gas fees are shared by the whole mirror pool.

2) Passive How many tokens and telegram groups can one person actually track? How many hours can one person actually stay awake? Alphr takes the work out of crypto trading.

3) Alpha — There’s always going to be someone with more alpha than you, why not just copy them with a portion of your portfolio?

4) Low barrier to entry — For many people the space is daunting and confusing, people don’t know which tokens to buy and the perceived risk of losing money keeps them from entering. Automated mirroring of the most successful traders, lowers the barrier to entry.

Fees

0.2% transaction fees
10% performance fee (profits only)

Alphr charges a 0.2% fee on all transactions, all fees are distributed to $Alphr holders via a burn mechanism.

A 10% performance fee is charged on all profits generated by the protocol. This performance fee is only charged upon withdrawal and only on the profit that has been generated for the user.

Alphr Governance Token



The Alphr token ($ALPHR) is the governance token of the Alphr protocol and captures all the value of fees generated by the protocol.

75% of the protocol fees will be utilized to remunerate Alphr users providing liquidity on Uniswap in exchange for the service they are providing to the protocol and Alphr ecosystem.

The other 25% are sent to the token holder controlled community development fund.

Holders will also be able to initiate and vote on governance proposals, in addition to voting on how to utilize the Alphr community fund. The Alphr community fund vesting will begin after a 2 month lock period to allow sufficient distribution of Alphr tokens amongst a wide holder-base.

Alphr Protocol User Rewards

30% of the total $Alphr supply will be allocated to protocol users and Mirrors. $Alphr will be allocated to protocol users proportionally based on the value of fees generated by each user. Wallets that are being mirrored will also receive a portion of the $Alphr mining pool to ensure fairness and goodwill in the crypto community towards mirror trading. In other words if your trades are being mirrored at least you’re getting some of the benefit.

Alphr staking

There will be a Uniswap V3 LP mining programme commencing in May.

Roadmap

Feb — Development commenced

Feb/Mar — Private sale

April — IDO + Uniswap listing

May — Early alpha launch

Summary

- Trade with the alpha of the best performing wallets in crypto.

- A new use case for smart contract pools and routing.

- Community owned via governance token and LP mining programme.

- Fair and incentivizing for wallets being mirrored.

- Opens up crypto and DEX trading to a wider userbase.



Twitter: https://twitter.com/alphrfinance

Telegram: https://t.me/alphrfinance

Announcement Telegram: https://t.me/alphrannouncements

Medium: https://medium.com/alphr-finance

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Alphr Roadmap

Alphr is excited to share their projected roadmap for the next three months and plans moving into 2022.

April will be a month of launch pads, establishing our brand amongst the crypto and DeFi community, our IDO’s and continued product development.

The month of May will see our initial users interact with the Alphr platform and we plan to have the first Alphr release and earning of LP rewards available.

June we plan to have our governance process in place and utilised by our community.

Q3 — Additional exchanges for mirroring

Q4 — L2 integrations + cross chain mirroring

2022 — Mirroring of more complex transactions, in addition to trades.

Please note that while we are sharing this roadmap for the next three months some of these tasks may slightly change in date range though we will endeavour to stick to schedule.

Twitter: https://twitter.com/alphrfinance

Telegram: https://t.me/alphrfinance

Announcement Telegram: https://t.me/alphrannouncements

Medium: https://medium.com/alphr-finance

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Alphr Astronauts Ambassador Program

Alphr is introducing decentralized finance to everyone! We are onboarding the banked, unbanked, crypto and non-crypto enthusiasts to Alphr and need your help to spread the word.

With the opening of our ambassador program applications Alphr has officially begun our mission!


What You Get as an Alphr Astronaut:


1. Monthly budget of $200 USD value of Alphr for weekly support

2. Governance rights

3. Early access to the Alphr platform and beta testing features

4. Access to Alphr core team members


What We Need

We need these kinds of Alphr Astronauts to join our group:


Alphr Astronaut

- Available social profile(s) with at least a combined100 followers (Twitter/ Facebook/ Linkedin/ Youtube/ Tik Tok/ Telegram)

- Eager to express opinions in the community and deeply faithful in that their opinions will help the members of the entire community

- Online/ on social media joining crypto discussions

- Engaged in contributing towards Alphr Astronauts strategy

- Onboarding of Alphr users and future Alphr Astronauts


To apply for Alphr Astronauts, please fill out the form below. We will check application forms and inform the qualified applicants for further interview. Once you have passed the interview. You will become apart of our official Alphr Astronauts group!

Alphr registration form: https://forms.gle/p93JD2DyrLQrb29a87

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Proposals to reduce the $Alphr inflation

At present the inflation rate with LP farming rewards is too high, given the number of participants. This is causing a negative price feedback loop. In addition to this protocol usage rewards will commence in August adding further inflation. I believe some small tweaks could improve this situation considerably.

Once the DAO is fully implemented this week I will be putting forward 2 proposals to change the tokenomics to reduce unnecessary inflation. These tokens will instead be kept in the DAO controlled multisig, the community could vote to later burn them or use them for DAO expenses.

1. LP farming



The pool of tokens labelled as “Liquidity” in the litepaper are currently scheduled to enter circulation at a rate of 125,000 tokens per month. With the majority of these being used for the LP farming rewards. Any spare tokens from this pool were pegged to be used to provide liquidity on centralized exchanges. At present additional tokens are not required for this use.

I propose rather than reducing the LP farming rewards by 5000 Alphr per month linearly, we reduce it immediately on August 1st to 62,500 Alphr per month and keep it at that level until the programme ends.

At present the LP farming programme is causing unnecessary inflation and isn’t particularly popular (less than 100 participants). Alphr Labs main wallet is staking and I am personally staking, we are receiving over 75% of the rewards daily (this seems wasteful). By halving the rewards the people that are currently staking will continue to receive an excellent yield, but without wasteful inflation.

This will prevent 500,000 Alphr tokens from entering circulation, these tokens will remain in the multisig and if the proposal passes will be under the control of the DAO.

2. Protocol usage rewards



Allocating tokens for protocol usage rewards for 10 years in advance is perhaps unwise, as we don’t know where the protocol will be at that point and if it will make sense to continue to reward users in the same way. In addition to this a linear distribution of tokens for protocol usage rewards is perhaps also unwise.

I believe it is most important to incentivize early adopters and users, therefore my proposal reduces the protocol usage rewards distribution to 30 months and front loads the first 6 months to drive rapid adoption.


This proposal will prevent 2,000,000 Alphr tokens from entering circulation, these tokens will remain in the multisig and now will be under the control of the DAO.

I will set up the above proposals on Snapshot as 2 separate votes, as some agree with one but not the other.

If both proposals are implemented this will mean the DAO immediately has 2.5M Alphr at its disposal, a sizeable war-chest that will allow the protocol and community to move faster. This is in addition to the 2M Alphr tokens that are vesting as part of the community development fund, these are also controlled by the DAO.

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MEME CONTEST: Alphr

Are you a MEME fan like we are at Alphr Finance? We decided to throw an EPED MEME competition! Show your MEME skills and enter to win up to $400 in ALPHR tokens!

What are the rules/requirements?

1) The meme should not contain any links

2) No NSFW memes. No discrimination.

3) Alphr Finance will not be responsible for any copyright infringement

4) MEMEs can be submitted between 27th August and 3th September


How to submit your MEME?

1️⃣ Tweet your MEME with ‘#EPED $alphr #eth #AlphrAstronauts #meme’

2️⃣ Like and retweet the contest announcement tweet

3️⃣ Tag three of your crypto friends

4️⃣ Submit your MEME in our #meme channel on Discord

The Alphr Astronauts team will validate all submissions and judge the memes. The four winners will be announced on 6th September 2021.


1. $400 in ALPHR tokens

2. $300 in ALPHR tokens

3. $200 in ALPHR tokens

4. $100 in ALPHR tokens

On top of the Alphr tokens you will receive:

+ Discord ‘MEME king’ level to shine in our Discord channel

+ Forever EPED MEME FAME! A title you want to claim, right?!



All official channels and accounts:


Telegram official: https://t.me/alphrfinance

Telegram announcements: https://t.me/alphrannouncements

Twitter: https://twitter.com/AlphrFinance

Discord: https://discord.com/invite/H5gUuSrf

Website: https://www.alphr.finance/

Gitbook: https://docs.alphr.finance/

Youtube: www.youtube.com/channel/UCINm9d2Mlf26il13X_GgnYg/featured

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The Highest Yield for Staking Your ETH

What is staking?

Staking can be best described as holding cryptocurrency or tokens to support a network and getting rewarded for it. Staking is a key way of earning rewards for holding certain cryptocurrencies. One way to look at staking is by comparing it to an interest-bearing savings account that rewards you for holding your funds in a specific pool over a set amount of time.

There are two types of staking. Single asset staking involves holding one cryptocurrency in a decentralized app (Dapp) or a decentralized exchange (Dex) and getting rewarded for your stake. The yields for single asset staking are usually smaller when compared to double asset staking, or double asset/lp farming.

Where are places you can single stake Ethereum?

Some of the best places to stake your ETH through single asset staking include decentralized finance apps such as Aave, Yearn Finance, Lido, and Celsius.

Here is a list of the current APY provided through each of these Dapps for staking your ETH.



*percentages are based on APY provided on (8/10/21)

How does single asset staking compare to double asset staking?

You will see in this article that double asset staking, or liquidity farming (LP farming) can result in greater yields than single asset staking with the Dapps listed above.

Let’s start by defining double asset staking.

Double asset staking, more commonly known as liquidity pool farming, involves providing liquidity for two cryptocurrencies in a liquidity pool and receiving rewards for your stake in that pool. In addition to the redistributed fees that a liquidity pool garners, many LP farms further incentivize stakers with native tokens.

Notable decentralized exchanges, or Dexes, where you can Lp farm with your ETH include Uniswap and Sushiswap.

On Uniswap, the current APY (Annual Percentage Yield) for LP farming with a USDC-ETH pair is 14.73% [https://v2.info.uniswap.org/pairs]

For the same USDC-ETH pairing on SushiSwap the APY is 16.08% [https://analytics.sushi.com/pairs/0x397ff1542f962076d0bfe58ea045ffa2d347aca0]

*percentages are based on APY provided on (8/10/21)

You can find more information on what impermanent loss is and how to reduce your risk in this article ( https://finematics.com/impermanent-loss-explained/ )

Why Alphr’s double asset farming programme is the highest stable yield available for ETH.

ALPHR, a decentralized social trading platform allows users to connect their wallet, mirror the trades of top wallets, and display the efficacy of their trading patterns to other users.

A cutting edge feature of ALPHR is mirror trading.

Mirror trading allows users to copy the trades of highly efficient and proven traders.

Imagine being able to mirror the trades of Warren Buffet during the outcropping of his career as an investor. ALPHR gives you the same opportunity but within the up and coming Defi landscape.

Can you pursue double asset staking with ALPHR and receive even better rewards than defined earlier in this article?

The answer is yes!


By staking your ETH with ALPHR you can receive even greater APY and rewards than the options listed above.

This is because Alphr redistributes 75% of all protocol fees in ETH to double asset LP farmers.

You will be sent ETH payouts every day (ΞPED) for staking the ETH/ALPHR pair.

In addition to ΞPED, farmers are rewarded 0.03% of fees on Uniswap and additional rewards in the form of the Alphr native token $ALPHR (with a current APY of 310%).

Below is a table showing the ETH yield based on daily protocol volumes for the first 2 days since Alphr has been in beta and at projected yields for different volumes:




Telegram official: https://t.me/alphrfinance

Telegram announcements: https://t.me/alphrannouncements

Twitter: https://twitter.com/AlphrFinance

Discord: https://discord.com/invite/H5gUuSrf

Website: https://www.alphr.finance/

Gitbook: https://docs.alphr.finance/

Youtube: www.youtube.com/channel/UCINm9d2Mlf26il13X_GgnYg/featured

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Alphr’s daily volume of $101,852 on launch day provided a yield of 57% to ETH-ALPHR stakers.

This is greater than the USDC-ETH pairing provided on Uniswap and Sushiswap by roughly 40%

Though, as the diagram shows, as the daily protocol volume increases on ALPHR the yield on your ETH builds and builds.

Just yesterday, 8/19/21 the yield on ETH was 99%

The reason why ALPHR can give such a great APY for staking your ETH is their redistribution protocol.

Though, as the diagram shows, as the daily protocol volume increases on ALPHR the yield on your ETH builds and builds.

Just yesterday, 8/19/21 the yield on ETH was 99%

The reason why ALPHR can give such a great APY for staking your ETH is their redistribution protocol.

ALPHR pays all users providing liquidity 75% of protocol trading fees.

This redistribution protocol increases yield for those staking with ETH/ALPHR and provides real value accrual to a governance token.

Here is an article outlining how value is applied to the ALPHR governance token.

Remember: Staking with Alphr gives you ETH Payouts Every Day (ΞPED)



Where can you find ALPHR?

You can stake your ETH with ALPHR through Uniswap V3 and receive the great returns described above in this article.

Additionally, you can connect your wallet to ALPHR and start mirroring trades and displaying your trading efficacy at https://alpha.alphr.finance/home ( https://alpha.alphr.finance/home )


Here is a quick article outlining how to stake your ETH with Alphr and start earning ETH Payouts Every Day (ΞPED) - https://medium.com/alphr-finance/how-do-i-receive-double-farming-asset-rewards-d4919b7be0ef


Your financial freedom is in your hands!
Until next time, Ragnar

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Proposal to reallocate protocol usage rewards to wallets being automatically mirrored


Following on from the successful vote to remove manual mirror trading:

https://snapshot.org/#/alphrdao.eth/proposal/QmW1Txq1S2aKSb7JY54i96CpAM3Ec64x6Ns3JTbxFrei15

There needs to be a vote around protocol usage rewards. Protocol usage rewards were previously allocated to manual mirror traders daily based on trading volume within the epoch. V2 will not have manual mirror trading.

I propose that all protocol usage rewards be re-allocated to wallets being mirrored proportionately based on AUM, as was initially outlined in the litepaper. This will garner goodwill with wallets being mirrored as they are benefitting via airdropped Alphr tokens due to their wallet being copied.

The emission schedule would remain as outlined in this article:

https://medium.com/alphr-finance/proposals-to-reduce-the-alphr-inflation-d6fd8cbf5e79

And that was voted in here:

https://snapshot.org/#/alphrdao.eth/proposal/QmatbpeXcks2yS7A4kd1xiST57bqzabGRSPBc327np3EJE

But rewards would simply be distributed to wallets being automatically mirrored.

Here is an example:

Rewards per day are 2500 ALPHR TOKENS. There are 3 Automated Mirror Pools copying 3 different wallets, each has a different AUM.




Please vote on the proposal here:

https://snapshot.org/#/alphrdao.eth/proposal/QmQZ33fqQh4J45fVWCMqq5rSifjnBE8EQCmnyVScB9jCUs

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How We Find the Best Performing Wallets in Crypto!



An in Depth Look at Alphr’s Quantitative Analysis Methods

Please note foot notes [1] will be referenced and listed at the end of this analysis.

Uniswap wallet ranking

The rise of Decentralised Finance (DeFi) opens up whole new perspectives on investment. Trading used to be confined to centralised, opaque agents (banks and brokerages) with intransparent incentives and questionable performance. Proprietary platforms lock users in and prevent deep integration between new toolsets.

DeFi follows an entirely different paradigm. It is an open platform — anyone can stake, trade, and even open up pools for new tokens. Data is open and freely available. Services integrate and allow new products to be built on top of each other, creating ever more useful and impactful products for investors.

At Alphr, we are a part of the movement to democratize finance. Our product allows users to mirror DEX’ best performing traders in an automatic fashion. By combining our insights with a Quantitative Finance approach, we extract value for our users and enhance their trading portfolios. This article sheds light on the process. We will look at how trades are evaluated, wallets ranked and screened, through to the final selection.

Method description

Evaluating a wallet can be neatly split into three stages:

1. Converting trades into wallet balances (positions)

2. Deriving the daily Profit and Loss (P&L) from wallet positions

3. Establishing a ranking scheme for P&Ls, to select the top wallets

We will look at each of these steps individually.

Trades to positions

Each Uniswap trade is a swap: users receive one token by sacrificing another. If today, at day t, I buy δ(X, t) of token X and sell -δ(Y, t)[1], my wallet’s holding h(X, t), h(Y, t) will clearly adjust respectively:



While updating the wallet’s positions with new trades is straightforward, what should we use for the initial positions in a wallet? A typical trader will set up their wallet, fund it initially with fiat funds, then trade these on a platform like Uniswap. The trader can top up the portfolio, or extract profits in the same route. These transactions are not visible in Uniswap trades, and arguably tell us little about the trader’s skill.

Instead, we follow the self-funding portfolio paradigm of Quantitative Finance.[2]. We will assume the portfolio starts empty, and ignore capital flows in and out of the portfolio. Whenever a swap occurs, the trader swaps one token for another of the same market value — so no profit or loss is instantaneously produced. It is only the subsequent price movements that lead to profits and losses.

As a result, after the wallet’s first transaction, in this approach it will lead to a negative position in the sold token. Can that even make sense? We’ll tackle that in the next section.


Positions to P&L

Since we want to consider more than just a handful of tokens, let us enumerate them with an index i.[3] The position held in iᵗʰ token at time t is h(i, t), and the change due to trading is δ(i, t). Let’s also call P(i, t) the price of iᵗʰ token at the (end of) day (t).[4]

It is then straightforward to value the wallet, to obtain its Present Value(PV):




Note that at the moment of trade, PV does not change, since one token is swapped for another of equivalent value. To calculate P&L, we simply take the change in the daily PV:



Since PV is a linear operator, it follows that the PV of the sum of two wallets is the sum of their individual PVs — that is, I can either first add two sets of holdings and calculate their PV, or calculate PV of two sets of holdings and add them, and I will get the same answer. We can demonstrate it as follows: Suppose I have one set of holdings, reflecting the trader’s Uniswap trades, h(i, t), and another, representing flows in and out of the wallet (e.g. to and from fiat funds), h’(i, t). Then



and therefore also



This means that we can logically separate the P&L due to initial balance from the P&L due to trading. This is perfect! Not only do we not need to know the initial balance, we can consider it separately to the trading ability.

We can consider two traders. One makes great trades, but her initial wallet holdings are quite sparse — all the profits are made from well-informed trading. The second trader is not so good at trading, but starts with a huge stack of coins at his wallet address. The profits for the second wallet may well be better, but for the purpose of choosing a wallet to mirror, it is the first one we would prefer.

P&L to Performance

Now that we have a daily profit and loss tally, how do we compare wallets? It is tempting to just look at total profits in USDT, but of course this automatically favours larger wallets, regardless of skill.

Instead, we will look at their returns. We get those by dividing their daily P&L number by half of their wallet’s GMV, or Gross Market Value. This is the total value of tokens held in their portfolio, in USDT:



The reason we take half the GMV is that, remember, our portfolio tracks both positive and negative positions. If I start with an empty portfolio and spend 1 USDT to buy some WETH, for example, my GMV immediately after the trade will be 2 USDT — one for the USDT virtual short position, and one for the new WETH holding, worth 1 USDT at time of trade.

Returns adjust both for different absolute sizes of wallets, but also of their relative sizing over time. If a wallet performs well when it is small, deploys the profits at larger size, then has worse luck, the profits may look patchy, but when correcting for the GMV at which trades are made, the returns will reflect overall skill of the wallet.


Time to do some compounding

Compounding is good for you — is the general mantra of investing. Even small returns aggregated over time add up to much more than the initial investment, and hey, crypto is not about small returns!

Let’s say we selected a wallet, whose daily return is on average μ, with standard deviation σ.[5]. What compounded return can we expect over a year?

With daily, independent returns of r(i) with 𝔼 r(i) = μ, Std r(i) = σ, we have



Done? Not quite, sadly. There’s still the σ guy we need to think about. We care not only about the expected return, but also the risk. Let’s measure the standard deviation of our annualised return r̅ too:



We can see that, unsurprisingly, the higher σ, the higher the variance of our returns. Should we care? So long as the average is high, does the rest matter?

It turns out we do care, quite a bit. The variance in daily returns induces a skew in returns. This is demonstrated on the following figure:



The histograms show distribution of r̅ for the same μ but different σ. Each case gives us an expected return of 170%, but with a different distribution of values. We see that for a low σ, likely compounded returns are clustered around the expected return, whereas for high σ, the returns are more dispersed, and in fact the most likely return is negative! Such returns are essentially like a lottery — if you do win, you win a lot, but you are unlikely to hit the jackpot.

How Sharpe are your returns?

This observation motivates ranking wallets by Sharpe ratio instead of average returns. In our context, Sharpe ratio is equal to



Sharpe ratio increases with mean return, but decreases with volatility. [6]. Sharpe ratio is the fundamental metric of performance in the investment industry; you can always double your returns by doubling risk, but you can’t fool the Sharpe ratio by doubling up!

One time wonders

We can nicely illustrate it by looking at the performance of two traders with identical uncompounded return, but very different return distribution. One gets a lucky coin sometimes, while the other makes small, consistent gains:




Top panel demonstrates a sample return over a year, and the two histograms show the expected compounded return over a year. I know which one I prefer! You can see that the “one-time wonder” portfolio has a much lower Sharpe ratio, despite having the same return. This then also shows in the distribution of compounded annual returns — although the mean is the same, the spread of possible outcomes is much tighter for the “slow-and-steady” portfolio.

We thus use the Sharpe ratio to screen for the most promising wallets, as they are the ones that lead to high, consistent compounded annual returns.

Why not…

We explored in depth why just looking at daily returns is unlikely to find the best traders to mirror. But there are other approaches too; could those work for us?

Per-trade returns

Instead of calculating daily returns, why not separate the portfolio into individual trades: trader bought WBTC on 2021–05–03 and sold on 2021–05–14, making a profit of… do we care about what the prices does between trades?

We do. First of all, we cannot escape losses simply by not closing out our positions. If I bought a token for $1000, and now price is dropped to $100, in reality I made a loss. If I have to liquidate the position, for example to exploit a new trading opportunity, I first have to book that loss — might as well be honest about it up front.

Second, the original trader may not care about intermediate losses, but wedo! We don’t know what time horizon the trader has in mind, their pain threshold or their strategy. Our users want to be able to get in and out any time, not just when it suits the mirrored wallet, and so we care about the intermediate performance.

Machine Learning

With so much data to hand (over 40 million trades done by over 2 million wallets), it begs the question — why not Big Data? Why not one of the weapons from the armoury of Machine Learning: boosted trees, Support Vector Machines, Neural Networks?

The problem we’re looking at sadly falls into a difficult corner for ML. Although we have a lot of data, each individual wallet actually has a small number of observations (about 20 trades per wallet). Data is highly non-stationary (changes over time): we can’t just buy SHIB and hope for the best. Uniswap has only been going in earnest for just over a year, giving a very short sample. Finally, if nothing else: crypto evolves at breakneck speed. What today is a great strategy may not work in 6 months time. What’s the next big thing? ML is not great at this kind of problems.

Selection

So, what are the top Uniswap wallets? How much better are the best vs. the rest? Figure below shows the histogram of Sharpe ratios for Uniswap wallet returns:



Most of these wallets don’t trade very often; this isn’t the domain of high-frequency traders. This is good news, since market-maker-type wallets are hard to mirror:



Instead, we see that most wallets trade infrequently, once or twice a day or less, which is ideal from a mirror-trading point of view. We don’t need to worry about single-block dynamics, price bouncing around during the day, it’s about medium-term trades, with alpha evolving on the timeframes of days to months.

The typical wallet is also not very large, with the vast majority under $1mn GMV:



That said, there are whales stretching out to many 10s of millions of USDT in value, they just aren’t very frequent. Very small wallets can be indicative of trading in very illiquid tokens too. These may be good opportunities for the traders themselves, but hard to mirror — the pie may simply not be large enough for everyone to share.

Two striking relationships we noticed are that history length and GMV are both mildly predictive of performance; larger, more established wallets perform better:



These are not persistent enough on their own to select a wallet automatically, but they certainly help guide our selection. After analyzing hundreds of wallets in detail, we narrowed in on wallets with highest Sharpe ratio having:

1. Wallet GMV of at least 2 million USDT

2. Average trade size of at least 25,000 USDT

3. At least 100 trades per year

4. Trading for at least 6 months

In addition, we analysed wallets for consistency, trading style, and standout trades, like discovering low or midcap tokens that significantly increase in Market Cap early into the trade.

We will soon be releasing our selected wallets in subsequent articles on Medium, stay tuned for details!

Summary

This article summarises our analysis of Uniswap wallets, the use of Quantitative Analysis to gain insight into Crypto trading and leveraging it to build new products in the DeFi ecosystem.

We help investors discover investment opportunities, in ways unparalleled in classical finance. We are not opaque brokerages with intransparent incentives. We are not building on private, hidden, locked-away datasets. We are instead contributing to the DeFi ecosystem, built on blockchain data, and sharing our analysis.

May the Alpha always fill your sails and we hope you join us on this voyage.

[1] We follow the convention that δ is positive when a user buys a token and negative when the token is sold

[2] For more detail, see https://en.wikipedia.org/wiki/Self-financing_portfolio

[3] You can think of i as a token’s address for example, but any unique identifier will do

[4] The “end of day” is arbitrary. Fiat exchanges designate a special time of day as “end of trading” — even if trading continues afterwards! We use midnight of UTC, since crypto trades 24/7, but other options make sense too.

[5] For mental convenience, we can imagine it is something like a normal distribution 𝒩(μ, σ²), although neither do we need this extra assumption, nor do we think it holds. Returns are wild and have fat tails!

[6] The 365* factor annualizes the fraction, so that it is the ratio of annual expected return to annual volatility, instead of daily

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The Future of Copy Trading

Alphr V2: Automated Mirror Pools

What is copy trading?

Copy trading is a method of trading in which one person imitates the trades of an advanced or respected trader with the intention of getting an easy edge above his or her own current trading abilities.

What are the benefits of copy trading?

The benefits of copy trading include:

1 Hands free investing: No need to consistently trade or keep up with up to date information throughout the day

2 Trade with the alpha of the best: The top traders that you copy are often aware of market trends and sell/buy at the most opportune times

3 Saving on gas fees: Copy trading funds are pooled together and routed into a single transaction, lowering overall gas fees


What are the potential downsides of copy trading?

The potential downsides of copy trading include:

1 Lack of investment control: Your trades are in the hands of the wallet that you are actively mirroring, you buy what they buy and sell what they sell

2 Different investment styles: Some traders may seem to contradict what you consider to be the proper investment strategies

The top places to copy trade at the moment:

What is Etoro?

Etoro is a social trading and multi asset brokerage company that first launched copy trading with stocks. They currently have more than 20 million users from over 140 countries using capabilities on their platform including traditional stock trading, cryptocurrency trading, and copy trading. Etoro has a private market valuation of $10 billion.

Cefi or Defi?

Etoro is a centralized finance company.

What coins can you trade?

Etoro gives the option to copy trade up to 29 cryptocurrencies at the moment. This includes common cryptos such as BTC, ETH, BCH, XRP, and DOGE.


How does Etoro source its wallets?

Users must sign up to be copy traded on Etoro. This includes displaying identity and giving up the “no KYC’ law of decentralized finance.

What is dHEDGE? (or others like Hord, FNDZ, & Wunderbit)

dHEDGE is a non-custodial, decentralized asset management application for synthetic assets on Ethereum. Users can manage multiple investment strategies across their app including pursuing copy trading of crypto assets. dHEDGE ’s native token, $DHT, has a market cap of $18.3 million with a total supply of 100 million tokens.

Cefi or Defi?

dHEDGE is a decentralized finance company.

Where does dHEDGE source wallets?

Individuals sign up to be copy traded on dHEDGE as well as to create other types of asset pools. In contrast to Etoro, dHEDGE users can maintain anonymity.

What coins can you trade?

Since dHEDGE on Ethereum is powered by Synthetix, dHEDGE managers can trade any synthetic asset. There are more than 40 synthetic assets available to trade spanning several types of asset classes. Each pool in dHedge can consist of up to 10 different asset types including farming positions, simple tokens, and lp tokens.

What is Alphr?

Alphr is a decentralized automated trading platform that lets you automatically copy trade the actual best performing wallets in crypto. Alphr’s automated mirror pools have been built based on analyzing the entire history of Uniswap and statistically identifying the most reliable, high yielding, and consistent traders. At Alphr, users can choose to automatically mirror these top performers by entering alphr’s automated mirror pools. With a $2m raise, including a $500k seed and $1.5m private round, Alphr has accomplished what no other copy trading platform has, allowing anyone to trade like the best.


Cefi or Defi?

Alphr is a decentralized finance company organized as a decentralized autonomous organization (DAO).

Where does Alphr source wallets?

Alphr has scraped Uniswap from the bottom up, processing every wallets’ history and analyzing its risk score, yearly gains, average trading performance, and much more.

What coins can you trade?

Users can trade any ERC20 token on Alphr provided that it is a part of the top performing wallet pools.



Unlike Etoro, Alphr is fully decentralized, does not require KYC, allows you to trade any erc20 token, and sources all the best wallets in crypto with a permissionless fashion.

In contrast to dHEDGE and currently all competitors like Hord, FNDZ etc, Alphr allows you to trade any erc20 token, and sources the best wallets in crypto and ranks them according to performance.

Alphr’s Automated Mirror Trading Pools:

What are they and how do they function?

Alphr has scraped Uniswap from the bottom up (in fact we scraped every tx since the first ethereum block), finding the most successful and reliable traders by analyzing their trades since the inception of their wallet. A team of PhD quants here at Alphr have identified reliable wallets based on multiple statistical analyses and designed investment pools that allow instantaneous copy trading of these top wallets. These specifically designed pools are Alphr’s automated mirror pools. These are NOT wallets that have signed up to be copied, these are the ACTUAL best performers that don’t want to be found.

The owners of these top wallets are allocated rewards in the form of the native $ALPHR token as an act of good will towards our platform mirroring their trades.


What are the estimated returns?

Although past performance does not completely predict future outcomes, our team predicts annual compounded returns as large as 800% a year by entering into our specifically chosen automated mirror pools. These numbers come from an assortment of statistical analyses including Sharpe Ratio, GMV, Trade count, & Trade Volume.


Is this the natural progression of copy trading and does it represent values in Defi?

Blockchain and Dexes enabled Alphr to exist, never before has anyone been able to identify the actual best traders in the world, because all the trades occur in a closed loop ecosystem. With the invention of the DEX, the future of copy trading is undoubtedly centered around transparent trading on-chain with capital flowing behind the actual best performers. Permissionless copy trading is representative of the rebellious spirit of Defi. In addition, the top traders need to remain anonymous for safety reasons (ie. you are your own bank), so Alphr’s automatic reward system is a perfect market fit for the Defi native. Currently there is a lot of larping from different people who’s trading skills just haven’t been examined enough in depth. Alphr’s automated mirror pools are bringing valuable tools to the common trader; a democratizing action well suited to the spirit of Defi.

Conclusion:

In 2020 Yearn brought an entirely new use case to Defi. It helped thousands of people make great yields from farming without needing the insider’s edge. Alphr is to copy trading as Yearn was to yield farming. At the moment the alpha traders of crypto are making incredible gains. Alphr helps the common crypto trader share in these gains by opening up opportunities to follow the same trades as the best in the game. Our platform does this all while continuing to stand by Defi’s fundamental values of anonymity, decentralization, low barriers of entry, trustlessness, and censorship resistance.


Twitter: https://twitter.com/alphrfinance

Telegram: https://t.me/alphrfinance

Announcement Telegram: https://t.me/alphrannouncements

Medium: https://medium.com/alphr-finance

[0406Antoxa1982]

ALPHR V2: Proposed Changes to the Protocol

As automated mirror trading goes live there are a few more changes that need to be made to the protocol in order to accommodate the updates to ALPHR V2.

Following on from the passing of this vote 👇(https://snapshot.org/#/alphrdao.eth/proposal/QmW1Txq1S2aKSb7JY54i96CpAM3Ec64x6Ns3JTbxFrei15) manual mirror trading will no longer be available in V2.

Alphr’s double asset farming rewards redistribute 75% of fees in ETH from manual mirror trading to stakers. Without manual mirror trading the ETH for double asset farming would need to be sourced from Automated Mirror trading.

Automated Mirror trading will generate significant revenue for the protocol via Token Sets streaming fees which are set to 10%. This means that 10% of total AUM in all AMT pools accrues to the multisig on a per block basis. This 10% accrues in the form of LP tokens for each Token Set AMT pool.

The pertinent question is, is it better for token holders if:

1. These LP tokens are periodically withdrawn from the pool and all constituent tokens are converted back to ETH then distributed to stakers (As was the case with manual mirror trading.)

Or

1. These LP tokens are left to accrue to the DAO multisig, as this builds the value of the treasury and ultimately this value all accrues to token holders.

I propose that option 2 is better aligned long term with token holder interests. It gives the DAO a diversified basket of assets in the treasury that could be leveraged for product development and growth. If we as a DAO are long on crypto then it seems philosophically misaligned to continually sell baskets of the best performing assets traded by the best performing wallets in crypto in order to redistribute them as a dividend to token holders. Option 1 seems more akin to a fortune 500 boomer strategy and option 2 a typical growth startup silicon valley esque approach. Where all revenue is reinvested into product development and growth.

In addition to this, option 1 has some downsides including:


1. High gas fees resulting in loss of value

2. Exiting high yielding coins that can benefit the DAO if funds were kept in them


Therefore, I propose this vote


1. Should 10% streaming fees from Automated Mirror trading be kept in the DAO treasury pending further votes on how to best leverage them?

Yes/No

(https://snapshot.org/#/alphrdao.eth/proposal/QmaiFz8CFuvP45AnN8LRHcENUiAkV38RLKv3daE2GyjuzW)

Some benefits of this change to the protocol include:


1. The DAO treasury gaining immense value and remaining in high yielding coins

2. Increasing value of $Alphr governance token since it is the only method of voting on uses of acquired value in the DAO treasury


Holding 100% of the 10% annualized AUM levy with the DAO treasury enables new features for Alphr including voting on launching new AMT pools with the designated coins that are in custody of the DAO, allocating funds to new reward programs in the future, and more.

In conclusion, we predict that allocating the 10% annualized AUM levy to be managed by the DAO will increase the inherent value of the $Alphr governance token and open up more opportunities for launching new wallets and features to the protocol.

Thanks, Ragnar

Twitter: https://twitter.com/alphrfinance

Telegram: https://t.me/alphrfinance

Announcement Telegram: https://t.me/alphrannouncements

Medium: https://medium.com/alphr-finance

[0406Antoxa1982]

Introducing Captain Crypto: Alphr V2’s Premier Wallet!

Deposit your ETH to automatically copy trade Alphr’s premier high yielding wallet today!

Who is Captain Crypto?

Captain Crypto is Alphr’s premier high yielding AMT wallet profile. His investments are diversified across some of the top cryptocurrencies including $ETH, $USDT, and $LINK.

Over the past year he has increased his wallet value by over 900%. Captain Crypto accomplished this through taking calculated risks with intelligent trade positions, consolidating those earnings into stables, holding, and thorough investigation of top performing coins like $LINK and $PNK.

Here at Alphr we have extensively studied Captain Crypto’s trading performance. Roughly 18% of his holdings are in stable coins ($USDT), 48% in $ETH, and 3.1% in $LINK. (percentage holdings are subject to change due to trading behavior)



Captain Crypto is a consistent trader and reliably sells the local tops and buys the local bottoms for maximum growth during any market condition. His sharpe ratio, which is a financial measure of return vs. risk shows a promising 1.80 ratio. This is a favorable value meaning that he is a reliable place to allocate funds.

For perspective, one of the top mutual funds in traditional finance, PRWCX, has a sharpe ratio of 1.44 and has a one year annualized return of just over 5%.

Captain Crypto trumps these figures immensely with not only a better performing sharpe ratio of 1.80, but also expected returns of over 800% on the year.

Some traders may argue that a 900% increase is not too amazing to accomplish, but we will tell you that for a small bag holder (<5 million) large percentage increases are much easier to accomplish and maintain when compared to large wallet sizes like that of Captain Crypto. Wallets that manage over 5 million in assets are much more difficult to 5x, 8x consistently through any market conditions.

Our statistical analyses have shown that Captain Crypto has consistently been a successful trader through bulls and bears.

With Alphr its easy for anyone to get an edge in DeFi through our automated mirror pools of extensively studied, top performing wallets. Captain Crypto is the first of many wallet profiles to come.

Alphr’s automated mirror pools allow anyone with a DeFi wallet to

1. Connect their Wallet

2. Deposit their Ethereum

3. Automatically copy every Captain Crypto transaction

Nowhere else in DeFi has an application enabled permissionless copy trading of the top performing wallets in crypto. You are early if you are reading this, take advantage now and automatically mirror Captain Crypto today!

Start Copy Trading with Captain Crypto Today!: https://www.alphr.finance/

Buy $ALPHR token on Uniswap: https://app.uniswap.org/#/swap?outputCurrency=0xaa99199d1e9644b588796F3215089878440D58e0

Read about our Statistical Analyses of the Top Performing Wallets in Defi!: https://medium.com/alphr-finance/how-we-find-the-best-performing-wallets-in-crypto-an-in-depth-look-at-alphrs-quantitative-837622dde897


Twitter: https://twitter.com/alphrfinance

Telegram: https://t.me/alphrfinance

Announcement Telegram: https://t.me/alphrannouncements

Medium: https://medium.com/alphr-finance