Exploring Investment Strategies on Housecat
The upcoming launch of Housecat will enable decentralized portfolio mirroring for the first time. After laying out the launch details in our previous blog post, we continue to dive deeper into the tech and the opportunities Housecat enables creators and everyday investors. In this post, we’ll be diving into some of the portfolio strategies we’d expect to see in the marketplace down the road, and how investors can benefit from having a variety of opportunities to automate and diversify their portfolios.
Today’s investing in crypto
Today’s Investors are equipped with all the tools and knowledge to trade crypto assets - Exchanges, trading desks, and the latest DeFi apps allow anyone to access the most exotic tokens on the planet with a few clicks. Tools aren’t enough - investing in crypto successfully requires keeping up with developments in the ecosystem, doing research on projects and their tokens, as well as executing on a strategy with discipline. The everyday crypto investor today may be able to access all the tools, but struggle to put together a dynamic strategy for a successful, diversified portfolio that is set for long-term growth.
Housecat was created for that everyday investor - looking to tap into the latest investment opportunities without having to actively manage it all on their own. The Housecat marketplace connects portfolio creators and their subscribers, allowing people to invest together by benefitting from the technology of mirror trading - having one wallet mirror the transactions of the other.
As a tech enabler, Housecat will rely on its creator community to add strategies to the marketplace and create viable returns for its subscribers. Housecat is made for investors who also look beyond short-term exposure to crypto assets - we expect portfolio creators to build strategies for the long run.
Subscribing to a portfolio on Housecat means mirroring the traders and assets of a specific crypto wallet - essentially copying its investing ideas. In practice, mirroring a portfolio means buying and selling the exact same assets automatically.
As the crypto markets continue to see asset migration on-chain (art, stocks, bonds), we think there’s a big opportunity in creating more exotic mirroring strategies that help investors diversify and generate alpha. Housecat believes more assets will arrive in the marketplace and allow investors to subscribe to more alternative assets and strategies. Once more asset types are enabled on the platform, we think the lowest-hanging fruit is the following:
Crypto is far from being one-dimensional - Yield assets on-chain represent one of the biggest opportunities in the market today, enabling investors diversification through income streams. We’d be excited to see yield-generating strategies on Housecat, allowing investors to benefit from protocols like Uniswap, Aave, Compound, and other liquidity protocols that allow lending and borrowing. Subscribers to these strategies could benefit from having exposure to yield-generating assets that move in tandem with the crypto markets.
Wall Street continues to migrate on-chain with tokenized stocks and their derivatives. We believe this trend is important, so investors can have exposure to traditional assets through a sovereign financial system. We think there’s a tremendous potential in creating stock portfolios on Housecat, so users can have exposure to other asset classes besides cryptocurrencies.
Today’s hottest NFT collection isn’t tomorrow’s. The reality is that investing in NFTs is highly nuanced, rewarding the experts and leaving the everyday investor to rely on luck.
Allowing exposure to this asset class within crypto can interesting to investors and allow one of the most unique investment strategies in the world today. Protocols like Fractional art enable buying and selling fractions of digital art, allowing more than one owner of a valuable NFT piece, and may enable this from the technical perspective. Down the road, we think there’s an interesting opportunity to create and follow an NFT portfolio on Housecat.
VC / Private Equity
We think all asset classes, including private equity, will gradually move on-chain and become more liquid. Last year, we’ve seen early innings to this trend with pre-IPO HOOD tokens that traded on crypto exchanges. If that becomes a reality, Housecat could see venture and PE funds operate through the platform with a decentralized LP network.
Practically, this could play out in many shapes and forms - private companies’ equity would be available as tokens, or have token derivatives that represent their value in the private markets. Portfolios of VC funds could be mirrored by tokens on-chain and followed by any crypto wallet owner in the world. This reality may still be a bit far-fetched, as there are some legalities to solve. However, we think there are enough reasons to see it happening over the next few years.
Let the code invest for you
More strategies in the marketplace would allow users to create and subscribe to all kinds of portfolios in parallel, and make it easier to have a diversified portfolio that consists of a few asset classes altogether or separately.
Imagine having your portfolio follow the best NFT collectors, crypto and stock traders, or venture portfolio - all on autopilot, directly from your own wallet. This is what Housecat enables while making it accessible to the everyday investor. Housecat is open to anyone with some MATIC in their wallet and charges a straightforward 25% of management and performance fees charged by portfolio creators, as well as a small rebalance fee of 0.25% - which we'll cover in our next article.
We’re excited about what the upcoming months will look like, and the investment strategies the community will bring to the marketplace. If you’re interested in being one of the first portfolio creators on Housecat - please reach out to us! We’d be happy to have you onboard as one of the first users of the marketplace.
Housecat is launching in a few weeks, and we couldn’t be more excited to continue unraveling more details about the tech we’re building, and the structure behind mirror trading. In case you haven’t - we invite you to subscribe to our waitlist and be the first to try out Housecat once we go live in August.