aHYPE performance review

On 28th of January 2022, Kassandra launched the Avalanche Social Index, the self-managed portfolio that tracks the most popular tokens on Avalanche, since that we have seen the pool growing in size and trading volume.

The strategy is working as expected and all important components and contracts are running smoothly.

That being said, it was not an easy ride as can be seen in some graphs that will be shown below. In this short report, we will show some key metrics on the pool’s health and performance.

Performance

Our main benchmark is AVAX, because it is the coin with the largest share of the portfolio and it represents the best how the Avalanche ecosystem is performing.

aHYPE and AVAX.

In the graph above we have a comparison between holding aHYPE and a portfolio that holds only Avax.

Here are some of the usual metrics:

aHYPE compared to other coins in the Pool.

Sharpe ratio is simply the Expected Return/Volatility, both daily means. The total returns represent the returns given between the 28th of February and the 2nd of March.

Regarding the benchmark, AVAX, a portfolio holding only this crypto gave better returns. That is the case because the other cryptocurrencies in our portfolio have not performed well, especially PNG, XAVA, and KACY.

It’s hard to predict whether AVAX or ecosystem tokens will perform the best, and that’s the reason to diversify: even investing in tokens that performed poorly, the Avalanche Social Index performed positively during the time period.

If the investor wanted to emulate the portfolio it would have to incur in all the costs involved in rebalancing the portfolio: slippage costs, network costs, and the risk of front running. All those risks can easily be avoided by just investing in the Avalanche Social Index and holding aHYPE, and this is precisely what we offer: simple crypto investing, diversifying risk, and leveraging returns.

Important to note that the Avalanche Social Index was designed to perform the best during periods when people urge for risk, hype, and FOMO. This was not the case during this first month, but even so, the Avalanche Social Index did well.

And the tricks of the trade: if you were staking aHYPE at Kassandra, you would be receiving a triple digits APR for the majority of the time, making the aHYPE performance even better and probably beating just holding AVAX — even in a time period that was not good for aHYPE strategy.

Overall Pool Stats

Overall stats, between 28 January to 02 March:

It is worth noticing that the swap fees (0.3%) go to the LP while the withdraw fees (3%) go to the Kassandra DAO. Swap fees are charged when swap operations are executed by users and arbitrageurs. Withdraw fees are charged when investors (LP) give their aHYPE tokens back to the pool in exchange of selected tokens.

Invest and Withdraw

The following graphs show a more precise view of the investments and withdrawals.

The first month saw consistent investment in the pool together with some days of massive withdraws, those happening especially because of market volatility and the risk-averse behavior of some of our depositors, which was to be expected given the external circumstances. The black dotted line represents the mean of the deposit and withdrawals which is positive and sums up to 11,229 USD.

On the TVL side, we had a sharp decline given market conditions and two big withdrawals made on 12th and 16th of February. After the fall from the highest daily close value (669,007 USD) it did not fully recover.

If we look at withdrawal fees we can see spikes on those days of large withdrawals, as expected. Withdraw fees are charged when the users send the minted aHYPE back to the pool and get in return selected token(s). The fees are paid to the DAO and the funds can be used to buy back KACY tokens. The withdrawal fees sum up to 14,629.51 USD.

Daily withdraw fees

Swap volume and fees

Here we have the daily swap volume and fees. A healthy pool will have a good amount of swapping as its TVL increases, just as we can see in the graph below. A high volume of swapping is good for LP’s since they collect the fees.

TVL (red line) and Swap Volume (green bars)
Daily swap fees

The swap fees are charged when a user makes a swap operation with the pool. It can be just a regular user wanting to swap one token for another or a dedicated arbitrageur looking to make a profit. Both are welcomed and the swap fees are paid to the liquidity providers (investors). The swap fees sum up to 2,329.31 USD.

Conclusion

This first month was tough for a DeFI project focused on a ETF, since crypto right now is not all well and easy, however, the pool took the punches rather well given its size and its main theme: riding the waves of hype.

Even in a period without the hype and FOMO, with a strategy that depends on it, the Avalanche Social Index did well and gave a positive return during the time period, and staking your aHYPE tokens for triple digits APRs would have boosted your returns even further.

Addendum

This article was edited on the 7th of April due to inconsitencies in volume and fees data, the performance section was and still is free of errors. In spite of the errors which have now been resolved, the overall interpretation of the data remains the same as before.

Disclaimer

The content in this article is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. There are risks associated with investing and you should always do your own due diligence and be consulting your financial advisor.

About Kassandra

Kassandra is an audacious project to delegate money management in a decentralized, efficient, and customizable way, working as a marketplace for tokenized and data-driven investment strategies.

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