BED DTF Overview
- Fund Name: BTC/ETH DCA Index (BED)
- Objective: Provide exposure to an equal-weighted basket of BTC and ETH aimed at Dollar Cost Averaging (DCA) into each asset monthly, while earning additional yield through lending into high-quality, low-risk money markets.
- Management Style: Actively managed.
- Index Details:
- Composed of BED assets: steakWBTC, steakETH, and steakUSDC (cash).
- Allocations: 40% BTC (steakWBTC), 40% ETH (steakETH), and 20% USDC (cash).
- Monthly rebalancing to align with the DCA strategy and target allocations.
Key Risk
- Concentration Risk: Heavy allocation to two assets increases sensitivity to Bitcoin and Ethereum price movements.
- Market Liquidity Risk: Potential slippage during rebalancing via Dutch auctions in volatile conditions.
- Smart Contract Risk: Dependence on Reserve Protocol smart contracts for minting, redemption, and rebalancing.
- Yield Risk: Exposure to lending protocols introduces risks tied to isolated money markets.
Key Facts
- Asset Class: Leading Crypto Assets (BTC and ETH with cash allocation)
- Benchmark: Bloomberg Galaxy Crypto Index
- Fund Launch Date: First week of February 2025
- Fund Base Currency: USD
- Rebalancing Frequency: Monthly
Fees and Charges
- TVL Fee: 25 basis points (bps) of TVL
- Platform Fee: 15 bps
- Governance Fee: 5 bps
- Curator Fee: 5 bps
- Mint Fee: 15 basis points
Dealing Information
- Minting and Redemption: Instantly mintable with and redeemable for a pro-rata share of its underlying assets through the Reserve Protocol.
- Trading Mechanism: Liquid, transferable, and instantly mintable and redeemable DTF. Rebalancing is done through on-chain Dutch auctions.
Portfolio Characteristics
- Number of Holdings: 3
- steakWBTC
- steakETH
- steakUSDC (cash)
Portfolio Manager(s)
- Name: Steakhouse Team
- Role: Responsible for active trading, rebalancing, and governance operations, including holding the Auction Launcher role.
TOP Holdings (%)
- steakWBTC: 40%
- steakETH: 40%
- steakUSDC (Cash): 20%
Sector Breakdown
- Crypto Assets:
- Bitcoin (BTC): Leading digital asset by market cap and store of value.
- Ethereum (ETH): Smart contract and decentralized finance ecosystem leader.
- Cash (USDC): SteakUSDC is an interest generating stablecoin vault lending to only blue chip defi collaterals. This is for liquidity and yield optimization in money markets.
Performance
- Can add here down the road when we have some historical performance data
Governance
- Governance Structure:
- Each DTF is governed by RSR stakers.
- An Aragon DAO where voters are DTF token holders will act as guardians who can veto decisions.
- Governance decisions include configuring fees, adjusting basket compositions, and setting auction parameters.
Anyone can create an RToken
In a similar way as how anyone can create a new trading pair on Uniswap, anyone can permissionlessly create a new Reserve stablecoin (RToken) by interacting with Reserve Protocol’s smart contracts. The protocol applies a system of factory smart contracts that allows anyone to deploy their own smart contract instance.
Creating an RToken can be done either by interacting directly with the Reserve Protocol’s smart contracts or any user interface that gets built on top of it. The first user interface for these smart contracts will be released by ABC Labs the company that's leading protocol development. Besides the creation of RTokens, this user interface will also support exploring usage and stats related to RTokens, RToken minting & redeeming, and RSR staking.
Non-compatible ERC20 assets
The following types of ERC20s are not supported to be used directly in an RToken system. These tokens should be be wrapped into a compatible ERC20 token to be used within the protocol. A concrete example is the use of Static ATokens for Aave V2.
- Rebasing Tokens that return yields by increasing the balances of users
- Tokens that take a "fee" on transfer
- Tokens that do not expose the decimals() in their interface. Decimals should always be between 1 and 18.
- ERC777 tokens which could allow reentrancy attacks
- Tokens with multiple entry points (multiple addresses)
- Tokens with multiple entry points (multiple addresses)
- Tokens that do not adhere to the ERC20 standard in general
Advanced RToken parameters
When deploying an RToken, the deployer has the ability to configure many different advanced parameters. The following list goes into detail about what these parameters do and some of the factors the deployer should keep in mind to set them.
As many of these parameters concern the Protocol Operations, we advise reading through that section of the documentation first—as it will give the deployer the necessary context to fully understand all parameters.
Trading delay(s)
The trading delay defines how many seconds should pass after the basket has been changed before a trade can be opened.
A collateral asset can instantly default if one of the invariants of the underlying DeFi protocol breaks. If that would happen, and we would not apply a trading delay, the protocol would react instantly by opening an auction. This would give only auctionLength seconds for people to bid on the auction, making it very possible for the protocol to lose value due to slippage.
The trading delay parameter may only be needed in the early days - before we get to a point where there is a robust market of MEV searchers. We expect that this parameter can be set to zero later on (once a robust market of MEV searchers is established).