Access to institutional investment products is dropped even lower with the use of digital currencies and staking models.
In a first of its kind move, Kronos Research, a quantitative digital asset trading and investment manager, announced that they would open up their asset management program, lower barriers to entry, and offer incentives to investors that stake Wootrade’s WOO tokens along with their allocated investment amount.
Professional quant trading strategies rely on a mix of high-frequency trading, discretionary trading, CTA-based management, and arbitrage to generate earnings for investors, but are typically restricted by very high minimum capital requirements.
These strategies provide a market-neutral alternative to direct investment in cryptocurrencies, as they generally deliver returns regardless of whether market prices are increasing, decreasing or remaining moderately stable. This provides a hedge for investors, particularly those comfortable with digital assets yet looking to reduce their risk exposure to bear markets.
Kronos Research incubated Wootrade, an institutional trading platform, to provide professional traders and exchanges with improved liquidity. The asset management program encourages users to stake WOO tokens, the native token of the Wootrade trading platform, at a percentage of their investment total.
In return, they receive a substantial fee reduction on both management and performance fees. Reaction to the program has been positive, with institutional clients including Fenbushi Capital contributing towards the $15 million invested that this strategy already manages.
Investors into Kronos Research can also use the WOO token instead of other cryptocurrencies to pay for asset management and performance fees at a discounted rate.
With the new asset management program from Kronos Research, the minimum required investment would also drop from $1,000,000 to only $50,000, signaling a shift to a more open financial ecosystem.
Long-term, Kronos Research Co-founder Jack Tan believes this could be decreased further due to crowdfunding and pooled investments through DeFi applications powered by smart contracts.
“One of the pillars of Decentralized Finance (DeFi) is to break down barriers and allow everyone access to wealth management tools that are usually reserved for institutional investors or high net worth individuals. There’s no reason why, with the correct KYC and AML measures in place, innovative platforms couldn’t make this technology more readily available.”
Kronos Research is one of the largest traders in the industry by volume, generating up to $5 billion per day across global exchanges including Binance, Huobi, Bithumb, and OKEx. Their multi-strategy discretionary trading product, named Apollo, carries a return of 63.77% and a Sharpe Ratio of 3.0.
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