Alluo AutoInvest

The new way to DCA

At Alluo we’ve just released our latest addition to the Alluo Pro web app.

You can now Dollar Cost Average (DCA) into yield-bearing Etherium and yield-bearing Bitcoin from your yield-bearing Stablecoins (and back). 👀

That’s a lot of yielding. The yield of dreams, if you will.

This article will go on to explain a bit about Dollar Cost Averaging and AutoInvest. So read on to find out more. 👇

Context

Newsflash: Trading is highly profitable for exchanges. For retail day-traders, notsomuch.

GMX fees keep printing

GMX traders lost $1.7m in one day on the day of the ETH merge. Cumulative PnL continued in one direction since then

It’s hardly news that timing markets is tough. The more volatile the market, the harder it is, and all evidence points to the vast majority of day traders losing money (see above…).

So what do you do if you want to invest? When to buy?

Should we all just pack up and wait till things are back to up only?

Sadly I’m not a financial advisor, so I certainly can’t offer up any advice on that. However, one approach some choose to adopt is that of Dollar Cost Averaging (DCA).

DCA the who, the what now?

Dollar Cost Averaging is a strategy whereby investors choose to make automatic, regular purchases of an asset regardless of the price.

This approach removes any effort needed to try to time the market, lessens the impact of any volatility, and also helps you to invest regularly.

For those looking to find out more, see the Investopedia summary below from their useful article about DCAing into stocks here.

Source: Investopedia “Dollar-Cost Averaging Explained With Examples and Considerations”

Dollar Cost Averaging Bitcoin and Etherium

OK, great. So if you decided this is the strategy for you, how could you start going about it?

Well, one way would be to simply set aside an amount you wish to spend, set yourself an alarm and manually buy your set amount every time your reminder went off.

That sounds somewhat inefficient….

A more automated approach would be to take a look at what a protocol such as Richochet exchange provides.

Here investors can set an amount they want to buy of a particular crypto asset per month and the protocol will execute on that for as long as the customer’s wallet has funds. Nice 👌.

https://app.ricochet.exchange/ allows customers to DCA into a variety of tokens

But what if that processes could be even more capital efficient? What if there was a way to earn yield on the tokens you were buying?

Oh hello AutoInvest.

🧐 AutoInvest

A key benefit of DeFi is its open, fully composable nature. Alluo is designed to be built upon and to build upon the features of others.

In that spirit, our DCA feature is built on top of the Ricochet exchange protocol, which in turn is built on top of the Superfluid streaming protocol.

Customers can currently choose to DCA into (or out of) our interest bearing ETH and BTC farms.

How does it work?

The new way to DCA

Simply choose the asset to buy, set how much to buy per month, approve the contracts, deposit funds and off you go 🚀.

But what’s even better, is that whilst you’re waiting to buy your ETH or BTC, you’ll earn a yield on your Stablecoin deposits.

🧔🏻‍♀️👩‍👨👱‍♀️👩🏾‍🦳 What does it look like for customers?

The eagle-eyed will see that there’s now a new AutoInvest section on the top nav of our Alluo Pro web app. 👀

New AutoInvest top nav

From here you can start a new AutoInvest stream on Polygon.

Start new stream button

To set up a stream, simply select “start new stream” and then, choose the source and token to DCA into.

You can choose to start a stream from depositing tokens or to stream directly from an existing Alluo farm.

Setting up a stream with an end date

When setting up a stream you can also select an end date, or choose to keep the DCA stream going indefinitely (assuming the funds are available).

Importantly first-time users will need to go through 4 steps.

• Approve the deposit token to interest-bearing Alluo conversion (e.g. USDC to IBAlluoUSD)
• Deposit funds (e.g. $100USDC)
• Approve sending your IBAlluo to Ricochet Exchange protocol
• Start the DCA stream

To help improve customer usability, we have added the different steps to the button at the bottom of the set-up screen. This is dynamic, so will change depending on what actions customers have previously taken on the Alluo Protocol 🙌.

Dynamic button information to signpost next steps

For example (as above) if customers have already deposited USDC into an Alluo farm, this step will be removed and they will see they only have 3 further steps.

Finally, once a stream or streams have been set up, you can view them on the AutoInvest tab.

AutoInvest stream details

You can see the source of the stream, the amount you have streamed to date (Total Value Streamed / TVS), the flow rate per month, when the stream started, the end date (if set) and importantly how long you have left in terms of funding for the stream.

🧐 What’s next?

This is just the start. Soon we’ll add more paths so it’s easier to go from one asset to the other without having to come back to stablecoins each time. We’ll also add more support for different interest-bearing tokens we support.

But wait.

What if you were able to set up a standing order from your bank account to Alluo which then magically allowed you to DCA like this into your favourite interest-bearing crypto asset?

Well once we have our on and off ramp with Unblock up and running in the coming weeks, you should be able to do just that 🙌.

🧠 How do I learn more?

If you still want to know more about AutoInvest, or have a suggestion for the team:

• Take a look around the web-app and have a play yourself (app.alluo.finance)
• Jump in the discord, telegram, twitter, or intercom (on the web app) and ask away ✌️

🚀 Ready to AutoInvest?

AutoInvest is officially live!

Jump into our web app right here and connect your wallet to start AutoInvesting 🤩!