This week, the MPATH token has joined the Disco Hedge (DHedge) program and can now be swapped for DHEDGE tokens.
How does this all work? Well, I have followed the progress of both the Archon and DHedge projects since inception, and MAP FinTech programs have always held tokens in projects such as UFM and TMPS, but it has only been in the last few days that the aims and structure of DHedge has clicked in my mind! Unless I've missed them, there seem to be few good posts that make this structure crystal clear - so this is my attempt to do so.
What is DHedge?
The ultimate aim of the DHedge program is to create a diverse pool of income-bearing tokens that will eventually be managed by the members themselves! This simple ambition justifies what may appear to be a slightly complicated way to invest during this development phase.
Let us look at the sources of information and then explain how you can get involved, then lastly at how MPATH fits into all this.
If you look at the DHEDGE token market on Hive-Engine, you will see precious few tokens for sale! I suspect this is to encourage the swap process as described below. However, you can buy DHEDGE directly using either HIVE or SWAP.HIVE by sending them to @discohedge. You will "mint" at a fixed rate of 4 DHEDGE per 1 HIVE. The process is automated, so you should see your new DHEDGE tokens within a few seconds.
Your DHEDGE tokens will produce weekly income paid out in HIVE on the Hive blockchain - not in Hive-Engine.
Now, here comes the innovative part: instead of just having members invest in DHedge and letting the manager make the investment decisions, members can influence such decisions directly by swapping certain "allowed tokens" for DHEDGE tokens.
Management is currently done within the DHedge Discord channel, so best to join and ask any questions there. Here is a recent snapshot of the token allocations of the DHedge fund - the "allowed tokens".
If we take MPATH as an example, you will see that 1 MPATH is worth 2.4 DHEDGE, so if you send 10 MPATH to @discohedge you will get back 24 DHEDGE tokens.
Also notice that every token in the fund has a Limit set; this is the maximum currently allowed within the fund for that token. This part is still under management control at this stage of development to avoid skewing the allocations. MPATH's Limit is currently 6000 tokens, but as we can see it has already dropped to 4192, meaning that 1808 tokens have already been swapped for DHEDGE.
As you can see below, every swap is recorded in the Discord channel and it shows how many of each token have been swapped and hence how near the fund is to its current limit for that token.
I assume that if a token has reached its limit, your token swap will be void and your original tokens returned to you automatically.
The weekly income from MPATH is then sent to the dedicated DHedge account and added to the DHedge pool and distributed to DHEDGE token-holders. Each token in the fund has its own rules and distribution mechanisms that are aggregated to produce the total for each week. Some funds are compounded to help the fund grow during these early days.
So, to invest in DHedge, a user does so by swapping their allowed tokens for DHEDGE tokens. Unlike a direct buy in HIVE, using the token swap function means your tokens are added to the whole pool as part of its investments. Although there are limits in place, and some management discretion regarding HIVE income, the allocation of tokens to the fund is wholly under the control of the investors.
So, why would one invest in DHEDGE? Well, the aggregating of different income-bearing tokens means that you get a fair share of the rewards without having to manage every token yourself. Also, the probabilistic miners are generally a poor investment for the modest investor (hence mining pools are popular across the cryptosphere) and adding income tokens means you may well be getting a higher rate of return overall than trying to duplicate the DHedge token-holdings with your own limited funds. What I'm also seeing is that seasoned Hive investors are joining to diversify their own portfolios.
What Does This Mean For MPATH?
Firstly, as I said at the top, there have been cross-holdings between our own MAP FinTech funds and the UFM/Archon funds going back many months. Having MPATH formally listed as an accepted token within DHEDGE makes this more obvious and public.
On the surface, this may at first appear to herald a net outflow of MPATH tokens. However, those MPATH tokens that are swapped for DHEDGE tokens have not been sold, they have merely been transferred from one account to another. However, if we go back to the key idea that investors can influence the DHedge holdings, we come to an intriguing idea.
If someone feels that MPATH will make a valuable contribution to the overall earnings of the DHedge fund, they can buy MPATH tokens and then swap them for DHEDGE tokens. The final outcome is that you will have the DHEDGE tokens you wish and the DHedge fund will have gained some MPATH. This is different to merely minting new DHEDGE by buying them with HIVE.
In essence, you will be buying your DHEDGE tokens using one of the accepted tokens that you feel will best serve the overall fund. If this was an investment trust, you would be buying trust shares using your existing company shares that then get added to the trust fund.
We shall monitor how this progresses, but it strikes me this could be the first good reason to increase our current token threshholds. They are currently set at 2k MPATH for voting and 5k tokens for maximum weekly distribution; these have not changed in many months (if ever) as there did not seem to be any demand to do so, yet the ability to change these has always been left open.
I hope this helps clarify how DHEDGE operates and the role of MPATH within its fund.
Any questions, please ask in the comments below or in our MPATH public chatroom. For DHEDGE questions, head over to their own Discord channel.
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This is a great update, and one that takes it from a new angle!
It is exactly right that, as participants, it is in our interest to gain exposure through the fund to promising projects! MPATH is a great example of this because in this way, holders that might not be able to achieve the full ROI of MPATH can still participate in its success.
Many thanks! Took some time to catch the light at the right angle.
:-)
Excellent post @mpath! Our "band of brothers" in the Man Cave already has a considerable position in DHEDGE and it is great to see posts like this explain how these tokens work together.
Onward and upward! 🚀 🌙
@roleerob
Posted Using LeoFinance
Yep, sounds like a good project. Thanks for highlighting it, will do more research now :)
Posted using Dapplr
Thanks - and thanks for your support over the months :-)
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