Strategy Report February 2024
The 512M DeFi High Yield Strategy is focused on yield generation and yield farming in decentralized finance. The strategy holds in principle, stable-coins, crypto assets pegged either by centralized institution with banked collateral or algorithmically operated decentralized autonomous organizations. These Stable-coins are contributed to Automated Market Makers such as Curve.fi among others, as liquidity providers to earn fees generated by these protocols. These fees accrued are represented as annual percentage yields, partially paid in base trading fees and partially in protocol tokens (E.G. CRV).
We engage in active strategy on recompounding protocol tokens back to base stablecoins, or holding for market exposures to have positive market beta and generate high yields in these risky assets as a liquidity provider. Our decisions on active strategy are reviewed daily, based on algorithmic analysis of core multiples in the DeFi sector, based on our proprietary analysis techniques.
Performance Metrics
Return since inception: 34.12%
Annualized return: 27.14%
Annualized Volatility: 4.22%
Sharpe ratio: 5.33
Alpha Observed: 22.49%
YTD Performance: 3.63%
Bitcoin Beta: 0.00197
SP500 Correlation: -0.00289
Historical Performance
Strategy Composition
Risk Metrics
512M Uses an internal risk scoring system for analysing its allocations for risk, scoring between 0 and 1, in the BPPA (blockchain, protocol, pool, asset) framework. We take these individual scores, and multiply them, to arrive at a final score, because in the world of DeFi, risk compounds aggressively.
We deposit assets in a pool, on a protocol, on a blockchain, and any point of failure in this chain, can create very large potential losses, using this multiple system and our own internal risk scoring both on qualitative and quantitative data, we avoid severely risky allocations and focus on high quality ‘blue-chip’ DeFi positions.
Internal risk score February 2024: 0.626
Target return for this risk score: 12%
Annualised returns YTD: 21.75%
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