Time to balance the balanced crypto portfolio?

I’m just putting this out into the ether, thinking out loud.

tl;dr: introduce PLAY as one of the underlying assets of BCP.

Summary

BCP is “marketed” as a balanced crypto portfolio. While it has served its purpose well during a period of time (giving exposure to the 2 top dawgs BTC ETH), it’s evident that web3/metaverse/gaming (lost track of definition) will play a substantial role moving forward.Wondering if it is time to perhaps look into a rebalancing BCP to include PLAY ?

Simple Breakdown

Current allocation of 33.33% each to BTC & ETH will remain whilst the 33.33% currently allocated to DEFI++ will be cut in half [16.66%] with the remaining 16.66% allocated to PLAY.

Motivation


Keeping in line with the “balanced crypto portfolio” thesis, it seems like the right move to make even more so considering we have a product of our own serving that market.

Would love to hear thoughts on this.

Thanks!

3 Likes

I really like this proposal, and think we should include PLAY in BCP to a greater or lesser extent, but the allocations are significant: is 1/3 BTC, 1/3 ETH, 1/6 PLAY, 1/6 DEFI++ optimal, or would it be better for PLAY to initially represent a smaller share of the pie, given the respective market caps?

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ahhhhh you make a great point. would have to agree that maybe having PLAY represent a smaller share initially makes a lot more sense! would minimize risk but still provide somewhat of an exposure.

In my opinoin the initial proposed distribution is fine. Metaverse/gaming isn’t going away (same as DEFI) and very small allocation would not make an impact.

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Without making any statements regarding the allocation, this proposed add to the Pie seems reasonable on my end

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Support to the consideration of the proposed changes perhaps with a smaller share of 50/50, given that DEFI ++ has been in decline-accumulation for some time.
PS. Nice to recall the debate over defining the BCP pie proposed by @jnova :clap:
https://forum.piedao.org/t/pip-32-piedao-balanced-crypto-pie

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Good point. That didnt even cross my mind. Putting aside the allocation portion of it. The the end goal is to incorporate PLAY.

It would make sense in my opinion to add it. What about an allocation like this?

BTC: 35%
ETH: 35%
PLAY: 15%
DEFI++: 15%

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I’m new to crypto. I was attracted to PieDAO because of BCP and PLAY, and hold both. I understand the simplicity of one pie but wonder if combing PLAY and BCP will create an index with so many assets, that BTC and ETH will be overpowering. Those who prefer distinct index categories might be drawn to Index Coop’s DPI, MVI or BED.

It would be a yes from me. Maybe its the round numbers lol but that would be an allocation i would have no problems with.

@Mark_sr apologies if im interpreting this wrongly & lengthy post but we are not “combining” the 2 but just integrating it by rebalancing BCP.

Personally, i also feel from a branding standpoint, it would be odd for a pie that is named “balanced crypto pie” but has zero exposure to an already huge yet still growing sector.

Btc & eth makes up 66% of BCP currently. If we were to rebalance it as per @alexintosh’s suggestion. It would be a 4% increase. Though i think that in itself has some upside.

Not quite clear about your last point but even if we keep BCP as it is right now, someone looking for an NFT index (example) can choose between the many choices out there. Ultimately people will choose who/what they think is best suited for them.

All we can do is put our heads together and come up with great products or pies! :slightly_smiling_face:

I’m in favour :rocket:

@alexintosh forgive my ignorance but what are the next steps i should be doing with regards to this? governance noob. just need a point in the right direction. :grinning:

In favor :+1:

think an interesting play would be

ETH: 35%
BTC: 25%
DEFI++ 20%
PLAY 20%

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…so crusty :man_astronaut:

Hey, not replying on behalf of Alex, but from what I can see there’s still uncertainty on the allocation. Try to get to an agreement on the allocation options, and create a Poll to gauge sentiment about:

  • Is there interest into this change?
  • members voting the different allocation options

Hope this helps

maybe @BlockEnthusiast and @alexintosh can elaborate further on the allocations suggested

I think ultimately this is Balanced Crypto Pie. The question is what is balance.

To me ETH has an upcoming 90% issuance reduction.
Crypto gaming is booming,
DeFi is underwater.
BTC is seeing pushback against POW on environmental front, with a lack of fee growth and nations pushing out miners.

If I were planning rotations, selling DEFI at lows for Play at highs feels in-optimal.
However rotations must be made. Reducing some of that rotation from DEFI++ by shaving down BTC I feel better reflects the market while retaining more exposure to upside we’ve been riding loses to maintain.

At present balance is represent by 3 evenly distributed pillars.

This has an elegance to it we wont maintain shaving down proportionally, but ultimately I think that’s ok.

There is not a lot of liquidity on market of BCP.
$49,090. Its incentives are single asset staking viewed as providing liquidity lower down the stack.

So most users have to redeem BCP to exit. (ETH/BTC/DEFI++)

BCP has 2.2m in in assets providing liquidity for them w/ $207k of that as DEFI++ (w/ no incentives for liquidity elsewhere).

To reduce that to 15% cuts that to below 100k on market (in a three asset pool which has higher slippage than two asset pools, soon to be four asset pool), pushing redemption further down the stack to where liquidity is incentivized.

I think finding ways to keep some liquidity on market is important, unless that’s covered with alternative revamps in farming structure.

Perhaps including ETH in DeFi ++ could natively provide liquidity for +L and +S in such a way that BCP incentivization can also cover liquidity deeper in the stack by proxy without needing additional ETH pair incentives.

Perhaps condensing DeFi++ could help as well.

However at present, too large a reduction in DeFi++ makes it prohibitively hard to enter and exit BCP without high expense or the Oven which is only one way at present.

We should keep this in mind when rebalancing.

To me, with the above considerations, maintaining I’d rather shave down BTC than ETH, but overly shaving DEFI++ may cause problems for users entering and exiting and we should try to offset the impact.

3 Likes

I felt like i got dunked on.(in a good way) Lol. But definitely explains how far apart we are in terms of thought process.wasnt thinking at those depths when i suggested this.

Condensing defii++ would also be timely i feel. Putting allocations aside for a bit, ultimately my headspace was just about incorporating PLAY into BCP when i suggested this. Wouldnt be as “balanced” if we had zero exposure to it which is the case currently.

would it be better to gauge sentiment of the community on whether they are for or against incorporating PLAY into BCP (putting aside allocations for now) first?

If they are, then time can be better spent on working out the finer details?

2 Likes

generally pro Play’s inclusion so think that’s a good step forward and have balancing allocations as the next stage once confirmed that’s desired