Short update on #SuperHodl, the automated savings algo based on Zero loans by @SovrynBTC. Still alive & still sim. only:
- data analysis: the algo vs price trajectories (#bitcoin & alts backtests, forecasting)
- algorithm improvements (liquidation likelihood vs mean gain)
🧵👇
#bitcoin is a good coin. Like, statistically and historically, it has performed very well on the algorithm.
We have now ran the algo on DOGE, BSV, MIOTA and XRP. The algorithm survives none of the pump 'n dump schemes that these coins represent.
No surprise here :-)
The algorithm shows, in price forecasting, that Zero-loan liquidation is possible if average daily price drops are large enough (for long enough periods of time). In backtesting, it's all good.
The algorithm cannot do magic. Several safety mechanisms have improved the resilience.
A few ways were found that increase mean gains at the cost of slightly reduced likelihood of being able to "exit" (pay back the loan) at a particular day.
I think it's reasonable for people with a long time preference. HODL a bit longer and you're fine again if it would happen.
I present the #SuperHodl automated savings protocol using #bitcoin on @SovrynBTC 0% BTC-collateralized loans, lending pool and spot market products (not released yet).
Collateral ratio can be showed safe against backtesting.
Each data point here shows a different starting point in BTC's history, starting around 8 years ago and taking 50 steps in history incrementally, every time running a shorter and shorter period.
The blue line shows the BTC gains over that period.
The algorithm takes your stash, 0%-loans USD against it, and splits it up in margin BTC buys & lending pool deposit. Then, as price changes (daily in current algo), it decides on paying back the loan to keep CR within a safe zone (price drops), or buying more BTC (rising price).
#ROI over over time: I'm HODL'ing, while currently, the SODL approach would have been in my favor. Zoom out 😉 #BTC ROI is most relevant, i.e. "how much BTC could I have purchased in May '21, instead of the miner, and how far along am I in mining that amount of BTC" -> 78%!