Investment Strategy
The aim of the investment fund is to use a rules-based, systematic process to sustainably grow the value of the treasury over time. The profits are passed back to 3 core areas of the WGMI ecosystem after specific growth milestones are achieved.
- 1.Ecosystem Fund
- 2.Prize Fund
- 3.Social Impact
The system is designed to adjust based off market conditions. There are 4 core ‘states’ under which the allocation strategy will adapt.
- Risk-off
- Cautious
- Optimistic
- Risk-on
In its current form, the way we decide the risk environment is discretionary. However, as the system is tested over time and becomes more robust, rules can be introduced to determine which ‘state’ is most representative of the market climate.
In terms of investment strategy, the core goal is consistent, stable growth. To achieve this, the predominant component should be yield-generating activities. The initial core investment scope includes yield farming, investments and NFT acquisition.
Area | Risk-off | Cautious | Optimistic | Risk-on |
|---|---|---|---|---|
Yield Farming | 75% | 60% | 45% | 25% |
Investments | 10% | 25% | 40% | 60% |
NFT | 15% | 15% | 15% | 15% |
Total | 100% | 100% | 100% | 100% |
We'll also break down each of these areas into 3 different risk buckets: high risk, medium risk and low risk. This will be based off a price volatility formula calculation and a small degree of discretionary categorisation. We'll lay out one such breakdown as an example. We'll explain these strategies in much greater depth on our blog. Link can be found in the 'socials' section.
Risk level | Risk-off | Cautious | Optimistic | Risk-on |
|---|---|---|---|---|
High | 0% | 0% | 25% | 25% |
Medium | 20% | 40% | 35% | 50% |
Low | 80% | 60% | 40% | 25% |
Total | 100% | 100% | 100% | 100% |
Yield farming risk allocation strategy breakdown.
Last modified 1yr ago