DeFI’s Yield farming - what is it?

A lot of the questions we get today in the crypto space are about decentralised finance (DeFi). Of late, yield farming has joined the conversation in a big way. Like all things new, there is large amount of information to digest and understand, this is not helped when the prices of these Defi tokens are going parabolic. The propensity is for people to jump in head first without doing the necessary due diligence.

We recently came across a fantastic article that does a great job at covering all the basics and various names in the space. Select the button below to access this article “What Is Yield Farming in Decentralized Finance (DeFi)?”

As the article perfectly concludes “What else can this decentralized financial revolution bring? It’s impossible to see what new applications may spring up in the future built on these current components. Nevertheless, trustless liquidity protocols and other DeFi products are certainly at the cutting edge of finance, cryptoeconomics, and computer science.

Undoubtedly, DeFi money markets can help create a more open and accessible financial system available for anyone with an Internet connection”

Momentum-Analytics.io team interviewed and featured on ICONOMI

To find out more about our companies strategy, advice to beginners on how to enter the world of trading, more on our teams background, our thoughts on DeFI and finally on the big investment themes we are currently looking at, read the blog from a recent interview we had with the team at ICONOMI.

Tokens, coins and actual companies

The last 10 or so years in the crypto industry have seen many tokens and crypto coins come and go. Some of them have proven to be highly valuable and sought after and have made many investors and speculators very wealthy.

However, the vast majority of these individuals and corporations have lost out believing they invested in something that actually had value.

Currently, one of the oldest organisations in the industry, was setup to assist venture capital (VC) investors in finding companies, not tokens or coins, to gain exposure to the explosive growth in companies building the industry. The company, I’m talking about is bnktothefuture.com

Obviously, VC and private equity investing is not for the feint of heart, and is generally limited to professional investors who understand the high risk / high return nature of the business.

What is important to know is that the platform allows retail investors to participate in this exciting industry through

1. ongoing new primary listings (new companies looking for funding) and

2. has a secondary market to trade (allowing those who have missed the opportunity to participate in the last 10 years of growth, the ability to invest in previous primary listings before these companies go public.

For those interested in participating in the secondary market, we provide advanced technical analysis for the largest markets here. (Please note we do not give advice, ensure you have read our disclosure)

For an introduction video on bnktothefuture’s Secondary Market, see below

What’s the best way to store bitcoin and crypto assets?

By far the best way to store bitcoin and crypto assets is on a hardware wallet. Trezor or ledger are industry standard. If you are only storing a few assets you don’t need to buy the best or latest product.

Always buy direct from the above companies (never second hand). Practice with a small amount first to recover from your seed (list of random words) and we’ve always found having 2 of the same device very useful. If you have a problem with 1, you can use your seed on the other/backup device to restore your wallet. It is also useful to store the backup device and a copy of your seed in a second location (just in case your house burns down), but remember to always keep the device and seed separate. For additional security, you can even consider breaking up your seed into 2 or more parts and storing them in different locations too.

Always make sure you update your hardware wallets with the latest software and just like your bank pin, it is wise to keep your pin a secret.

It may seem daunting at first, but it’s not difficult. You just need time and some patience.

After all is said and done, it’s like having your own bank branch in millions of locations (as you can take it with you wherever you go) and if something goes wrong you can go to your backup location, enter your seed and your wallet will be ready to use again.

Updated 15 Sep 2020

How do I buy crypto for the first time?

If you are looking to buy crypto assets with fiat less than 1k USD, setup a coinbase account using your local bank details, debit card or credit card. Verification is quick and easy. If you are looking to move crypto straight away, please note that most exchanges have about 72 hour lock-in period for first timers before you can withdraw.

If you are looking to move large amounts of fiat to either invest or take funds out of crypto assets, equivalent 5k USD or more - it is advisable to setup a Kraken account to use as on or off ramp.

As above, before depositing fiat on any account, please setup google 2FA on either coinbase and/or kraken accounts (Basically if you add bank account details to any site on the web, ensure there is some form of 2FA) - do not use SMS authentication

In addition to the above, always use a secure email (not the one linked to your social media accounts), a good free service like protonmail can be used.

So how much should you allocate to our Crypto Strategy?

Image by Daniel Öberg

This is the question we are asked all the time and it’s actually very simple if you start from the following position.

An approach we have used is to take our net worth and divide it by 20, ie calculate at 5% what the maximum amount is that we can invest in a new idea. For example, suppose the sum total of all our assets: property, stocks, bonds, precious metals /cash, art and contents (ie anything that has a re-sale value) is 100k, then the amount we would be happy to allocate to crypto is 5k.

If we already had some crypto like BTC or ETH, then we would subtract that amount from the 5k and allocate the difference. So following on from the example above, assuming we already had some crypto to the value of 1k, and our net worth was 100k, we would allocate 4k to a crypto strategy.

The next question which comes up is: I don’t have that 5k or 4k in liquid assets, how do I get there?

To answer this, again we would do and have done the following, take the amount calculated above (either 4k or 5k) and divide this by 12 to calculate a monthly “dollar cost averaging” amount. For this example, that would compute to a monthly amount of 333.33 or 416.67 respectively.

The advantages of dollar cost averaging are clear, over time the peaks and troughs are averaged out and purchase price tends towards the mean. An additional advantage is that small monthly amounts can add up to significant amounts over time.

The next obvious question is why 5%, how did you come up with this number? We are in the business of managing risk, being well diversified and building strategies that have inversely correlated assets is key to successful investing. Think of a 5% allocation like having 20 different types of horses. The race is ever changing and the requirements to win will differ, your horses will need to be able to sprint, pace themselves over long spells in different climates and when some are not doing so well the others will have to step up.

Going into this race with 1 horse just isn’t sensible and realistically looking after more than 20 horses becomes extremely onerous.

Taking the above into account, for a well balanced allocation of projects in the crypto space, be sure to check out our offering - Rational Active Allocation

All circumstances are different, so individuals should always seek independent financial advice.

DEFI - why is it so important?

This week, I think its about time we cover some DeFi talk. So what is it, well… I’m not going to tell you what it is as there are frankly hundreds of articles out there on Decentralised Finance (DeFi) - This is a very good place to start though - What is DeFi?

Back to the main question - it is important not because it is going to replace banks, but because it will give people across the globe access to an alternative.

As an opinion piece, for me, choice is what it is all about in the end. You can decide to use your existing institutions or you can try a new one. Obviously the new one, will need to be superior in order to lure you away, so will have to work harder to gain trust and ensure its customers are treated fairly ( …while we are on this point, our regulators should take note, your job is to ensure fair competition to ensure all people get the best possible deal. It is not to pick sides - because if you do - you WILL be replaced).

Obviously I don’t really want to preach here, but if you are interested:

• make sure you look into how DAI is created;

• try understand why MakerDao’s protocol is so special;

• look at high interest savings from Compound;

• try to see how powerful a force “communities who work together” can be with their DeFi integrations - ie Uniswap, Link, KNC, Oasis etc etc etc.

Lastly, another good read on the topic is - A beginners guide to DeFi

Why no lockdown in Q4 2016?

image by Alexander Dummer 

Looking at the data from EuroMOMO (independent site who publish weekly bulletins of the all-cause mortality levels in up to 24 European countries or regions of countries), you get a pretty good view of when deaths occur through the year in Europe.

Courtesy of EuroMOMO - from https://www.euromomo.eu/outputs/images/Pooled-number.png

For the 2 age groups 15-64 and 65+ there is a clear pattern that occurs in the last month of a year and the next 2-3 months in the new year. Is this maybe the flu season in Europe?

Certainly looks that way!

Anyone else surprised that the COVID death rates in the Southern Hemisphere aren’t that high at present? Well, its highly likely that its not flu season and the last thing I’ll leave you with is -

Why was there no lockdown in Q4 2016?

The deaths in the 65+ years was as high in Q4 2016 as it is today. This is not about the COVID pandemic, it is a financial crisis. The actions of the comrades in central governments around the world are louder than ever and while you are asleep, they are looting everything. PS - I once sold one South African Rand for four Zimbabwe dollars, and later one South African Rand for billions of Zimbabwe dollars, I’ve seen this before (although not as subtle).

• Isn’t it absurd that for every $1200 cheque that goes out in the US … almost 100k in debt per person is added (your children and grand children are being indebted for life)

• Apple and Google are now providing your data to governments around the world to track (this is the 1984 Orwellian nightmare - were you paid for this, it’s your data after all)

• Physical gold and silver is way more expensive than the paper IOUs (financial games to rob people of their wealth?)

• People were paid to take oil away at $40 barrel (first time in history)

• Cash is being targeted again (no cash means you can go into negative interest rates, which destroys savings)

• Governments are buying JUNK bond ETFs (that is communism, and most central banks have no mandate to do this)

• 16-17m people are un-employed and the stock market has its biggest gain ever (Wall Street can not be human)

• The FAANG stocks just broke out to new all time highs (how will people pay for their products in the future - I don’t know)

• There are no markets that trade like real markets, people can’t compete against endless paper chequebooks (Except for one - Crypto markets)

On the last point - you won’t believe what is happening, the comrades are now looking to regulate it and ban some of them too. Fiat proxy coins (because they work better then their own digits - i.e. you can have fiat stable coins in peoples hands by the weekend if they have a smartphone, not months like the current cheque system in the US - by the time the cheques arrive they’ll have starved to death) and privacy coins are also on the hit list (of course privacy coins will be on the list - governments need to know everything about everyone - so my question is - who guards the guardian?) .

Apparently the populations around the world all need saving from crypto because it is so volatile. Well if it is so volatile, then don’t buy them and leave the crypto community alone. When the crypto industry was being setup, they didn’t ask for hand outs and they are not asking for any now. The millennial generation and beyond needs a break, they’ve been indebted by idiotic policies for years now to protect boomers retirements - let them have Bitcoin and crypto - from the chart below they must be doing something right.

Courtesy of stockcharts.com - https://stockcharts.com/freecharts/perf.php?$INDU,$SPX,$BTCUSD

It may be volatile, it is still 1200% superior to stocks from 2014 (I dare you to check it from when it started). With all the money printing around the world - what do you think will happen to this chart going forward and can you now see why “the comrades” are looking to interfere - email your representatives around the world today and let them know you will not stand for it - we owe it to our children and grand children.

This madness needs to stop, having this community as an enemy will not end well for the comrades.

---

We have recently reduced our fees, if you looking to participate in our Crypto offering

1) Register for Product offerings here

2) Download the PDF instructions at the bottom of this page here … the pdf instruction cost will be reimbursed on successful setup for clients > 500GBP

#COVID19 - Fear is the goal

Image by Free To Use Sounds

Its taken me a while to get my thoughts together on the madness that is COVID19. Almost every conversation globally has been taken over and the hysteria seems to be getting worse.

At the time of writing, there have been approx 30,000 deaths attributed to COVID19. My thoughts go out to all the families who have lost loved ones to this virus and I know that nothing I say will bring them back.

My aim is to try and slowdown the hysteria and suggest a different way of looking at the numbers that are being presented, ask why they are being presented in this way and then hopefully help you to come to your own conclusions.

There is a conversation going around that talks about a bag of 100 skittles and 3 of them are poisoned, would you take one? This is supposedly referring to the “calculated death rate of COVID19”. Let’s switch it around a little, you are starving and haven’t eaten for week, there are 100 bread rolls and 97 are fine and 3 are poisoned, would you take a chance taking one and eating it if your life depended on it? Subtle difference but hopefully you get the point.

The next point I’d like to address is the confirmed cases vs number of deaths statistic. You can see all the COVID19 data on the World Health Organisation (WHO) website. What is puzzling for me, is why a known (deaths per country) is used with an unknown (confirmed cases). I.e. From a statistical point of view, you should really only be using “known knowns”. Confirmed cases is not a known known, there are countless un-confirmed cases, it is impossible to tell with any accuracy who has had the virus, how effective the test is by country and lastly how effective the record keeping is in each country.

So what else do we know, well we have a pretty good take on the population numbers as referenced on wikipedia - List_of_countries_by_population. So lets see what story we can tell about survival rates using July 2019 data (I have not used forecasted population numbers based on previous growth rates, but could have done so - the survival rate will increase if I’d have done it this way).

The countries listed below account for 94.07% of COVID19 deaths to-date (28258), so there’s no question on the sample size. The Survival rate to date *(to 4 decimal places) for these countries seem pretty high to me. Even Italy, with its >10k deaths, has a very high 99.9834% survival rate to date, with Spain being the other outlier with a survival rate to date of 99.9878%.

Survival rate = (1-(COVID19 deaths/popultion)*100

data as at 30 Mar 2020

* I understand this rate will only decrease as we go if we do not adjust the monthly population numbers, but remember this was a test to get a feel for the scale of the problem, month on month analysis should give you the flattening and factoring the countries growth rate will also have a material impact on increasing the survival rate

Next up, lets have a look at the data in a slightly different way, i.e. The number of survivors per COVID19 death by a countries total population. It is simply the inverse of the survival rate calculated above. So here we see that in China, for every ~434k people, 1 person dies of COVID19. In Italy that number is 1 in 6041 (thats about 166 people in 1 million).

data as at 30 Mar 2020

As per the Italy example above, I have include the deaths per million for our sample of 12 countries in the chart below and I’ve also included the estimated growth/decline in populations for Q1 2020. This data was calculated from the same data referenced above, available on wikipedia, which gives the population growth rate from July-2018 to July-2019. I have used these to calculate the estimated Q1 growth in populations.

data as at 30 Mar 2020

What I find most fascinating with the chart above, is that for populations that are either declining or close to flat, the deaths per million number tends to spike, Spain and Italy being a case in point. Going deeper into the Italy number, it was projected that the population of Italy would decline by approx 19,200 by end of Q1 2020 anyway.

I do not mean to trivialise the Italy numbers but lets just put some perspective on the numbers. I’ve included further analysis by region which includes data from 2/3 of the worlds population (some 5.145Bn people of a total of 7.713Bn). I will update this analysis at some point to include more countries to get to 80%, but you’ll hopefully get the point.

data as at 30 Mar 2020

The deaths per million people attributed to COVID19 currently sits at 5.56 people (or 1 out of every 179,9596 people globally have died from COVID19) and your survival rate, as it currently stands, is 99.9994%

In the same time that we have mourned 30k deaths to COVID19, the world has celebrated the birth of millions of babies **, the first 3 months of 2020 - the world population has grown by ~20.5m

**congrats my friend on the birth of Willow over the weekend

What do you think happens to the survival rate if we add ~20.5 million people to world population every 3 months - it goes up - i.e. we get closer and closer to 100% and the probability of survival increases.

So why then are the numbers being presented in the way that they are and why is the world going into a systematic financial melt-down. These are some of the questions that I’ve been asking myself:

1. Why focus on deaths and not survival?

2. Why use confirmed cases (its almost impossible to measure and using it will guarantee you create max fear with the 3/100 deaths)?

3. Why have main stream media focused on the death rates and not survival rates?

4. Why has the federal reserve gone from fractional reserve banking to non reserve banking (it matters because the dollar is the global reserve currency - wars have been fought over this behaviour)?

5. Why are we doing QE again if everything was so wonderful?

6. Why are corporates being bailed out?

7. Who benefits?

Having watched the movie, The Great Hack - Official Trailer here if you haven’t seen it, I can’t help but think that this virus is being used in a global thought experiment. The strategies employed are similar and to be honest, some of the videos we’ve seen circulating are incredible in how they’ve manipulated peoples behaviour in a time of crisis.

“It is impossible to know what is what - because nothing is what it seems”

…The Great Hack

The craze that started globally for toilet paper is a classic. I mean of all the things you really need in a lockdown if your life depended on it - toilet paper would not be one (think shower, river, sea etc to resolve toilet paper issue) and Maslow's hierarchy of needs for what’s really important.

From where I’m sitting, it looks like fear is the goal. Never let a crisis go to waste is the old saying - well this time was a master stroke. The central bankers have got their way to no-reserve banking, the politicians have a scapegoat for the pension crisis. What’s more its even been done in such a way to prevent people going out and objecting by enforcing lock-downs and quarantines across the globe.

In this extraordinary time, be safe, ensure you have diversified everything. If you haven’t yet looked at and educated yourselves on Gold / Silver / Bitcoin / ETH and other Crypto assets, start now! If you need help with the latter, visit Crypto Participation on our site to get started.

There is a great opportunity to learn about these now. Fiat currency (which is not money) is about to flow in massive quantities. Keep an eye open for giveaways and any attempted inroads made to reduce you privacy rights, they are never free and the people getting and asking for them are more than likely the ones who least benefit from the long term arrangement of handouts and state sanctioned monitoring.

To all the nurses, doctors and medical professionals, who have worked tirelessly in hospitals and clinics around the world (in-spite of the mass fear that has been created) - Thank You!

Link to Analysis here

---

To ensure you never miss our blogs, signup for our free newsletter here

The Golden Constant - Part 2

image by Lopez Robin

The purchasing power of gold is truly spectacular when chaos is about you - it actually packs an enormous punch. Now I can hear you all say … the last month, gold has been down almost 15% in dollar terms, this is no place to put my savings.

My reply would be yes, you are correct, but the thing you are missing is that gold is able to buy so much more in times like this. Don’t believe me, but believe this. In ~36 years, you have never been able to buy cheaper oil than now. In 2008 (GFC time) you could buy about 1/5 barrel of oil with 1 gram of gold, the long term average is approx 2 grams per barrel - TODAY IT IS A MASSIVE - 2 BARRELS PER GRAM.

The problem that most people make is giving it a dollar, pound or euro value - try change the way you are wired to think about how much or many of an item it will buy. Also use it to value assets, you will get a very good idea about how cheap or expensive other assets are.

In todays climate when central banks and banks can create currency so easily (in fact we have just gone from fractional reserve banking to no-reserve banking curtesy of the virus). As a result of this money creation, it is very difficult to value assets, and if you are saving for retirement, you want to ensure you are able to value investments. Using fiat to value assets, really isn’t the way to do it - it is actually the trap.

Gold has consistently been the best asset to protect your purchasing power - I sure hope you are enjoying The Golden Constant: The English and American Experience 1560-2007 by Roy W. Jastram (Author), Jill Leyland (Editor)