Da Power Play – Technology building blocks for digital assets trading automation
I used to play with a lot of Legos when I was a child. I would first build the model by the instructions, play with it a bit, and then throw it down the stairs and watch it smash into a thousand pieces. After picking up the pieces off the floor, I’d build a design of my own creation and then repeat the whole process over and over again.
Since I’ve been introduced to trading, I’ve found that there are a lot of similarities between the two. When developing a trading plan, you start with a logical premise and build out a model. You then put it on a network, watch it lose money for a while, then change a few of the parameters and run more tests. Eventually you figure out a strategy which works well enough and which can be left to its own devices to trade without supervision. The process of building, testing, tinkering and coming up with something new never gets old.
In my previous trading capacity, we had a team of quants who were paid to sit in a room for 6 months, write code in R and then test out to see if their strategies were successful. As I’m not a quant and the most coding I’ve done is a few months of full stack studying, what they were doing was quite foreign to me. So when I saw Digital Assets Power Play (Da Power Play), I was really intrigued. They have a created a platform set of visual building blocks for trading of digital assets algorithmically and digital investment product creation. In short you can do this:
Mind blowing. Now, whenever I have a trading strategy I want to try out, instead of hiring a coder to do the work, I could just use Da Power Play to snap together the strategy myself, backtest it on their platform and then take it live on multiple exchanges. All of this will be made possible by their DPP token.
The genesis of Da Power Play has actually been maturing for some time. The team told me that “We started few years ago as a private fund with 30 investors and had a nice run of trading. Then we started to build up on it and then add block, block, block and then at one point, we saw okay, we have a good basis that can scale.”
The core basis of Da Power Play’s platform will be its two environment algorithmic trade builder.
The first environment will be drag n drop, allowing people like me who don’t know python or R to build automated trading strategies using just a few clicks. A sample strategy from the whitepaper is one “that buys a digital asset being traded when the short-term moving average crosses the longer term moving average, and closes a position when either the short-term moving average falls below the long-term moving average, or price drops by 10% from its peak.”
Every strategy can be listed on their market, where investors or the DPP platform itself are able to provide funding. The best strategies will be allocated more capital and gain a higher reputation. Also, the strategy market will show “strategy overview, historical back-tested data, any live trading data, risk controls, fees and caps (min. & max. sizes of investment and strategy itself) if any.” It will be free to co-invest, but all strategies need to be executed on the DPP platform. Investors will keep their funds in a private wallet and when they are ready to deploy a strategy or co-invest, move it to a strategy wallet used only for trading and governed by smart contracts. Thus, investors themselves will be able to determine their own additional risk controls and pull money from a strategy in case it fails or starts to decline in value too much.
“If you’re a developer, you would first start to create your own strategies, either by drag n’ drop editor or writing code. Normally, after that, there is a process of reviewing and back testing your strategy, so we see how it behaves on some historical data, to get a sense how your code preforms and if its good then it can be listed on the platform, so other members can support them it with funds.”
Once the code is created, the Da Power Play platform will allow for developers to back test their strategies. Historical data will be available to both building environments. DPP tokens are necessary to complete each backtest.
“You can write your own strategy, put it out there by yourself, the idea is to have a distributed economy,”
In their Ecosystem, Da Power Play will host three types of wallets to meet the needs of different parties (investor, developer, strategy owner, fintech company): private, strategy and public.
Private wallets are used by all digital asset stakeholders and will allow for owners to “develop and deploy their own strategies, and use APIs or the platform interface for live trading, or allocate assets to a different listed Strategy Wallet at the owner’s discretion, planned risk-reward appetite and portfolio mix.” The wallet will host only Ether, ERC20 and DPP tokens. One issue for Da Power Play in the beginning will be fiat liquidity issues, as they say in the whitepaper, however, it’s an issue they are working on solving as quickly as possible.
After a strategy is created by the fintech asset manager or developer, they or co-investors will be able to fund the Strategy wallet. These types of wallets will show NAV in either ETH or ERC20 tokens. The strategy owner will be able to determine fees for deposit and withdrawls, as well as decide whether to show performance or not.
The Public Wallet will be a fund pool, managed by Da Power Play, to provide co-investment up to 4x the original amount into the best strategies and products in the community. The use of the Public Wallet will bring more and better funding into proven strategies and also allow Da Power Play to fuel growth on their platform. The wallet will be funded by capital raised during the ICO.
“The idea behind the public wallet is to provide additional assets to software developers with the right ideas, but with lower liquidity and lower assets. So we will back those strategies and provide both, liquidity, additional assets, and visibility on the platform.”
The entire team are co-founders of KRYPTO INVESTMENT PARTNERS LIMITED and the KIP EYE trading system which Da Power Play’s platform is based.
Matej Ujević – CEO started as a software developer in London for a company called DigiMob Ltd. Later he founded a telecommunication company called Metronet which built out the largest Metropolitan fibre network in Croatia. After that he founded KRYPTO INVESTMENT PARTNERS and Digital Assets Power Play. He is also involved as an investor in another fintech startup company (M obrada d.o.o.) involved in the transaction business and is serving as an advisor for the commercialization of a Bio-tech incubator (www.biocentre.hr).
Saša Hunjak is their finance expert and previously worked for Erste Bank Croatia as a Senior Risk Analyst and as a recovery manager for Privredna banka Zagreb d. d., where did analysis of retail and corporate portfolios.
Nikola Jokić – When he’s not playing in the NBA for the Denver Nuggets, Nikola is the leade developer for Da Power Play. Previously he worked for software company Q Alliance Ltd as Senior Software Architect and founded nodepie.ninja.
Strengths and Weaknesses
Everything about Da Power Play has left me wanting more, however, the software is still being developed.
“We are still in the alpha stage. What we have is a kind of solution that works for us. A small number of strategies are not so usable, deployment procedures. We have the collection model, analysis model, data storage, are collecting bunch of pairs, have access to the exchanges and a place for algorithms. What’s currently developed is basically focusing on the scalability of the system, so we can allow hundreds of thousands of people to create their own strategies.”
Once they release their product, if they have a good marketing plan, it could be adopted quickly.
I wonder though how big of a market there is for people who are interested in algo trading, but don’t know enough code to make their own strategies (I’m one). I know that the marketplace will be a great addition, but it will be interesting to see how many regular people use the building block tool once it is released.
Another issue for the team is speed. As of right now, Ethereum takes around 15 seconds for each transaction to process in the best case. For algo trading, this is comparable to how fast the last Ice Age took to melt. I asked the team about this and they said “We cannot have a tick every 17 seconds as a blockchain block that’s – sometime in the future, yes you will be able to run algorithms on blockchain, but now currently, it’s not possible. We are kind of doing a parallel solution and then transfer bits as they are developed to the blockchain, similar to Swarm.” Thus, a lot of Da Power Play’s processing is actually done off chain. Once blockchain speed increase with Casper or the release of EOS, they will adjust.
All of the fees for Da Power Play’s platform will be paid in DPP tokens. The fees for the platform are pretty straightforward, every trade has a flat 0.12% of the transaction value or less due to higher volume, a 1% fee for provided liquidity and each backtest will cost 1 token. The token will also be used for the building blocks, payment for fintech developers and strategy owners and for licensing fees set by them (1% AUM, 10% profit).
In order to use the platform, users must own at least 100 DPP. Users with more than 30,000 DPP tokens will be given 24 hour notice as to which strategies funds from the Public Wallet will be used for. Token holders having more than 10,000 tokens and a monthly fee turnover greater than 10,000 DPP tokens will have transaction fees reduced by 0.01%, until they hit 0.06%. Token holders having more than 25,000 or 1,000 ETH in their wallets tokens can access backtesting free of charge.
Da Power Play’s ICO is being administered and run by CoFoundIt. Pre-sale for CoFoundIt holders starts on September 19th and the general crowdsale starts on September 21st. CFI sales work in three phases. In phase 1, investors are limited by the amount of CFI tokens they hold. In Phase 2, the sale will be open to all Priority Pass CFI members for unlimited amounts of investment. In Phase 3, the ICO opens up to the general public and then runs for 30 days.
There will be a total of 100 million DPP tokens created. The crowdsale will represent only 25% of the total tokens. The rest will be for the team, liquidity reserves, CoFoundIt and other advisors. In case any tokens are sold, they will be burned.
The minimum raise for Da Power Play will be 2.1 million USD, a small soft cap in comparison to the rest of the ICO market. The hard cap for the sale will be 5.1 mln USD, a figure I believe they will quickly hit.
Try out Da Power Play when it comes out. Plus, the token is attractive with the cap set at only 5.1 mln USD. They should hit that.
It’s a great application, and not something I have actually seen in the really trading world either. I guess that makes them pioneers or just selling to a market which doesn’t exist. We will find out soon enough. I’ll be one of their users though.