WallstreetBets, the Reddit group that rocked the GameStop (NYSE: GME) rally on Wall Street is all set to take on the traditional institutional players and hedge funds with its new exchange-traded-portfolio (ETP) of some top 20 cryptocurrencies they have curated.
Dubbed as the WBS Crypto 20 ETP, this is a weighted portfolio of digital assets just similar to the index funds in the traditional markets. Nearly 6000 participants voted for WallStreetBets’ first crypto ETP. The WBS Crypto 20 ETP represents a compilation of crypto assets, however, shall soon evolve to tokenized versions of shares like Tesla (TSLA).
The ultimate goal is to provide users access to both the crypto and traditional markets. currently, the 20 selected assets have been weighted by their market cap of valuations. Besides, there a 15% max cap for optimal portfolio diversification along with a 0.2% swap fee.
WallStreetBets plans to have on-chain voting to finalize the portfolio composition. Investors holding the $WBS governance tokens can participate in the same. BTCVIX, CEO of the WSB DApp said:
“The initial ETP results attest to the combined strength of our community’s wisdom and make up a diverse portfolio that will likely improve returns, mixing players like Bitcoin and Etherum with DeFi blue-chips and promising smaller project tokens. Looking forward, we plan to bring our ETP model to top-tier exchanges and big brokers, pioneering a new application of DeFi with diverse investors at the center of decision-making.”
Regular Rebalancing and Asset Exposure
The official press release notes that upon the launch of the ETP, the $WBS toke holders can continue voting for the portfolio rebalancing and asset exposure. They also get the voting rights to decide on the DAO operations and the yield farming procedures on the Etheruem network or the Binance Smart Chain (BSC).
Jaime Rogozinski, founder of WallStreetBets and strategic partner of the WSB DApp project said that the combination of crypto and tokenized shares can help in creating a balanced portfolio to weather any sort of market condition. Such ETPs can help to strategically hedge market risks. Rogozinski further added:
“Risk can mean a lot more to retail investors than massive hedge funds, and with the extreme market dips that recently took place, ETPs offer a promising and reliable model to protect the ‘little guys’ and position them for long-term financial prosperity.”
Crypto exchange Binance already started offering tokenized shares to users against BUSD tokens.