In a previous article, I noted some initial thoughts about the currently-in-beta, smart-contracts-based Prism investing platform. In this article, I’m going to discuss some of the ideas that are forming around how I will use it when it’s launched.
While crypocurrency is broadly considered an emerging asset class on its own, I like to further consider use-case based sub-classes, for example:
- Distributed Exchanges
- Prediction Markets
With Prism, investors will be able to conveniently implement use-case or sub-class-based investment strategies. For example, I might define:
- Value — Bitcoin (60%), Bitcoin Cash (20%), and Litecoin (20%)
- Utility — Ethereum (60%), Ethereum Classic (20%), and Stellar (20%)
- Privacy — Dash (30%), Monero (30%), Zcash (30%) and Pivx (10%)
- Distributed Exchanges — EOS (40%) and 0x (60%)
- Prediction Markets — Augur (50%) and Gnosis (50%)
So rather than trying to predict the individual winners in these use-case categories, I could instead create and invest in diversified “Prisms” built around each, leaving me only with the task of identifying the most promising technologies/protocols in each class, regardless of how many there are, and allocating according to the success probabilities I would assign to the constituents.
And at the highest level, I would fund these categories in proportion to the relative values I assign those use cases long-term. For example:
- Value — 40%
- Utility — 40%
- Privacy — 10%
- Distributed Exchanges — 5%
- Prediction Markets — 5%
Acquiring and holding all of these currencies would be quite inconvenient, and possibly insecure, but implementing the above strategy could be done in a few clicks and half an hour on the Prism platform!