DAO Golden Cross — An optimal return regardless of market conditions
The DAO Golden Cross strategy is a strategy that takes advantage of both yield farming and technical analysis in order to provide the optimal return regardless of market conditions.
The DAO Golden Cross strategy has two conditions, depending on the 50-day and 200-day moving average (MA) of BTC.
- When the 50D MA is greater than the 200D MA, creating the Golden Cross, it indicates the market is bullish therefore the strategy would deploy the strategy capital to WBTC-ETH farm on Sushi.
- However when the 200D MA exceeds 50D MA, creating the Death Cross signal which indicates a bearish market, the strategy would then switch to a more conservative USDC-ETH farm on Sushiswap, in order to preserve the capital during the market downturn.
When the 50D MA is greater than 200D MA:
- 100% as WBTC-ETH
Exposure: WBTC and ETH (50% ETH, 50% WBTC)
Liquidity Pair: WBTC-ETH
When 200D MA is great than 50D MA:
- 100% as USDC-ETH
Exposure: USDC and ETH (50% ETH, 50% USDC)
Liquidity Pair: USDC-ETH
All rewards earned will be automatically sold and reinvested back into the strategy to maximise the compounding effect. The portfolio will be rebalanced quarterly to reset the strategy back to its standard allocations and weights laid out above, so that the strategy can maintain an ideal allocation.
Due to the yield earning nature of this strategy, it is expected that this strategy performs better than holding a pure spot position in the underlying assets in the same allocations.
As the assets are allocated in liquidity providing pairs, impermanent loss is a risk for this strategy when the price of one asset significantly outpaces the other in the pair.
Besides the standard 0.5%-1% deposit fees and 20% profit sharing fees (see here for more details), there is a 10% fee on the yield farmed when collecting rewards for each liquidity pair, which is used to pay the gas fees associated with harvesting rewards and depositing LPs.
DAOventures is a DeFi ETF Index Fund for fund managers and crypto investors. Its mission is to make DeFi simpler, more accessible, and inclusive. DAOventures provides baskets of auto-compounding LPs, upon innovatively designed crypto ETF index funds.