MITIGATION OF RISK

GUARANTEED ASSETS:

The Exchange guarantees the cryptocurrency which is staked with them. This means the amount, 10,000 in the How-it-Works illustration, can not be lost while under contract.

MARGIN CALL / FORCED LIQUIDATION:

The Exchange secures the loaned cryptocurrency by what’s known as Forced Liquidation or Margin Call. In the How-it-Works illustration, if DOGE would have decreased in value while Robert was in his 10x margin position, the Exchange would automatically sell (liquidate) Robert’s position if he had lost 90% of his initial $2,000usd holdings. In the event of a forced liquidation the 9,000 DOGE owed to the Exchange and the fees would be automatically repaid to the Exchange at the time of the Liquidation. 

Robert would have essentially lost 90% of his account holdings or $1,800usd but the Exchange along with the staked cryptocurrency would be made whole upon the Margin Call against Robert’s position.

PRICE FLUCTUATION / TREND PROGNOSTICATION:

The risk in this investment lies in the price fluctuation of the underlying cryptocurrency while locked into a staking position. While any investment into stocks, securities, or currency which is traded on the open market is subject to such changes, with the help of trading software and algorithms it is possible to forecast short term market patterns. This gives us the ability to stake assets which are currently on an upward trend for the staking duration. Being that returns are not based on the increase or decrease in price, the investor will still make the guaranteed return regardless if the underlying cryptocurrency is increasing or decreasing in value. In the event that the cryptocurrency has lost value over the duration it was staked; we would elect to hold the position in the current underlying asset and re-stake until the value has been recovered.

INVERSE ASSET HEDGE:

Certain Cryptocurrency and digital assets are know as Inverse Market Movers. Simply put they increase and decrease in value, opposite the majority of other assets. By holding a certain percentage of these inverse assets in our portfolio we are able to hedge/mitigate against a large scale market wide downtrend; as these assets tend to increase in value when Macro assets, such as Bitcoin, decrease in value.