There are certain benefits of discretionary long and short strategies, particularly when compared to other trading techniques utilized in the crypto markets. These trading methods have only been available on centralized digital asset exchanges, however, with the growing number of scandals associated with centralized platforms, there is a real risk on top of the typical market issues.
Due to these potential problems, crypto traders and investors may be forced to look for options that are less appealing alternatives. But it’s worth noting that some of these platforms are proactively moving to a decentralized version in order to eliminate this risk. At present, Kunji is the only decentralized platform offering these types of trading strategies.
Investing in Actively Managed Funds in a Non-Custodial Manner
For context, the platform aims to streamline the asset management sector with a solution that enables clients to invest in actively managed strategies in a non-custodial manner. It’s no secret that cryptocurrencies are a highly volatile asset class. And crypto investments may provide sizable gains if approached in an effective manner.
But most traders tend to lack the technical know-how and get overwhelmed by the complex functioning or characteristics of crypto-assets. However, when it comes to digital asset management services, there are several viable options. Although hedge funds are actively managed, these types of funds have considerable entry barriers. In addition to these limitations, there’s generally no transparency, a minimum initial investment is needed, and there’s usually no dependable custody of funds.
In comparison, the non-custodial platforms such as yield-based protocols are not actively managed. They also do not offer automated asset management strategies and provide relatively low yield or perform well only in certain market conditions. Moreover, asset management services may be based on discretionary investment theses that run long and short strategies developed by asset managers via the platform. This approach should help asset managers to deliver returns similar to hedge funds in nearly any market cycle.
Investors or other financial professionals with solid crypto-asset management skills may become a fund manager and carry out their own strategies. Notably, Kunji Finance has incubated its internal asset management team, which is currently behind the “Alpha Blue Chip Focused Strategy” on the platform. As more fund managers become active on the platform, different trading strategies could be employed, offering clients with additional investment options. It’s worth noting that the user who is interested in becoming an asset manager may provide the details needed to register via the official website. As explained by the development team, the voting mechanism is used for the applicant to carry out a strategy on the Kunji Finance platform.
There are a number of trading strategies currently available in the crypto space. Some of these techniques are focused on maximal capital appreciation while also achieving optimal returns on assets for investors. This is achieved by leveraging professional investment techniques by active trading in Bitcoin (BTC) and Ethereum (ETH) as well as other digital assets in the DeFi / Metaverse ecosystems.
Currently under development, the top cap digital assets strategy from Kunji aims to seek maximum capital appreciation by implementing active cryptocurrency trading techniques and risk management in order to make sizable returns via the top 15 crypto-assets by market capitalization.
Then there are various arbitrage opportunities as well as a balanced strategy with the objective of making optimal returns for investors via standard arbitrage, taking advantage of price fluctuations across various markets. This approach seeks to capitalize on opportunities created by price inefficiencies without taking directional exposure to the crypto-assets market.
Digital Asset Platform that Operates in a Trustless Manner
As mentioned, Kunji is a platform that aims to support these strategies. The initiative started as a centralized platform (kunji.io), which still provides services to Indian clients. But after the major setbacks associated with centralized platforms (especially in the past year), the team decided to introduce a digital asset management platform that operates in a trustless fashion.
This platform will allow clients to invest in discretionary strategies, which have been limited to HNWIs. But with this innovative platform, these same services are now accessible in a non-custodial manner to a larger number of users. The team reveals that they began working on the concept and vision behind their project back in December 2022 and launched the beta platform in August of this year.
The beta version of the platform is currently live. And 500 users out of the approximately 25,000 from their early adopter program were reportedly whitelisted for the beta phase. Importantly, this decentralized protocol provides a solution where the asset managers actively manage funds without taking custody of the funds.
Effectively Enabling Discretionary Long, Short Strategies
As crypto traders would know, yield-based protocols usually offer low returns, while long-only rebalancing strategies perform well in specific market cycles. But this innovative platform enables discretionary long and short strategies via the integration of spot and derivatives exchanges. This approach enables fund managers to consistently deliver alpha with enhanced risk management. In addition to these benefits, users may withdraw their funds at any given time, because Kunji does not store the clients’ private keys.