The tokens are tied to the underlying assets. You receive value as the assets appreciate. Further, 100% of profits are reinvested to augment the NAV. This includes income from;
- Valuable forks
- Staked assets
- Valuable airdrops
- Liquidated tokens sold at a premium.
Through the use of futures contracts with fixed expiry dates (not perpetual futures), in combination with its proprietary software, Invictus Capital is able to offer investors the same underlying exposure at a lower overall cost than buying and holding spot assets directly.
- The derivative markets are multitudes more liquid and have lower trade fees overall — this means lower trading costs and less slippage due to smaller spreads at each rebalance
- The security benefits of this approach are also numerous — a cash balance can’t be hacked in the same way that BTC or Ethereum can be
- The greatest value-add for investors, however, is that by gaining exposure through futures contracts, the fund only needs to post a portion of its assets as collateral to gain the full crypto exposure it requires. This leaves capital available for the fund to store as cash and lend for additional yield — any returns generated by this additional active component will be distributed in the same manner as C10, with an equal split going to the fund
- We estimate that we will be able to generate approximately $20 000 to $40 000 additional net monthly yield for the fund based on the current fund AUM and this has the potential to increase significantly. This additional yield will be utilized to purchase additional cryptocurrency or cryptocurrency exposure during the weekly rebalance process
- Following the successful testing of the strategy using company assets in Q2-20, implementation of the strategy with a minor tranche of C20 fund assets began in September. This resulted in additional returns of $8,580 for the fund which exceeded management fees over the same period. Once fully scaled, the operational improvements are expected to yield in excess of 4% p.a. The fund’s management team will continue to optimize between this and staking opportunities, which earned a total of $46,990 during Q3-20.
Supplementary income is disclosed in the quarterly reports.