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A Synthetic Tokenized Asset Representing A Pool Containing BTC And DAI - And OutPerforming BTC - Would Be Cool

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reonarudo
@reonarudo
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There is a relatively simple way to outperform the long-term performance of BTC.

Bitcoin has four-year cycles based on the mining reward halving that takes place every 250,000 blocks, which corresponds to about four years.

Source: https://digitalik.net/btc/

What you have to do is sell the tops and buy the bottoms. The price action of BTC is so violent as to go up 100x in a bull market and go down -85% in a bear market that it is not necessary hit anywhere near the exact bottom or the exact top for your strategy to vastly outperform BTC in the long run.

Now, a token representing a share in a fund containing a pool of tokens containing BTC and a reliable and decentralized stablecoin such as DAI would be an ideal way to gain exposure to an asset outperforming BTC.

How? The fund would be controlled by a smart contract that looked at various signals indicating bull cycle tops and bottoms triggering a balancing of exposure to BTC and DAI accordingly. When close to the top based on the four-year cycle theory and technical indicators, the contract would trade BTC for DAI. When close to the bottom based on the four-year cycle theory and technical indicators, the contract would trade DAI for BTC.

The price action of Bitcoin is astonishingly regular when you look at multi-year charts.

An added benefit to buying such tokens would be FREEDOM FROM TAX LIABILITIES owing to not having to sell at the top. Conversions from BTC to DAI would take place trustlessly and completely under the hood. The user would only have to hold the synthetic token that would nearly always be going up or retaining its value for as long as the four-year cycle theory holds.

The fund itself would not be a security because it would be completely decentralized. The SEC ruled Ethereum to be a non-security owing to its decentralization.

What do you think? What would be the technological requirements for building such token without third party risk? Could you do it with Thorchain or Polkadot? Could such a token be created using Hive-Engine?

Posted Using LeoFinance Beta