On February 16, Midas CEO Trevor joined our Reddit to answer the questions from the community. More than 50 questions have been asked by our active community, but we have chosen only the most important ones.
Questions from the community
#1. Could you get into specifics about how Midas can offer market-leading APY and what differentiates your strategy from others?
Trevor: Currently, we have over 50 yield positions across six different blockchains. In many cases, we use combinations of strategies, like lending one asset and borrowing another that produces more yield, while automatically managing high health factors.
There are three main directions of investment department team:
- DeFi monitoring. Analysing all the blockchains and all the projects that feel decent, constantly reevaluating emerging opportunities, discussing and testing them and managing capital within it.
- Quant analytics. Taking ideas and hypotheses into testing through code and deep analytics. The next step here is to build the onchain analytics module (smth between Duna and Nansen) to give our investment team the raw data from blockchains. Should come this month and highly boost the efficiencies of our ideas.
- Development of investment infrastructure. Automated swaps, entering and exiting positions, managing lending positions, and so on.
So, we are not only DeFi token farming, which gives us an extra edge on top of others.
#2. Any plans for a proper app, instead of a simple webpage and google/discord login? With more security measures?
Trevor: Yes. Hope for the app in Summer. We already have a lot of finished mobile modules, but the priority still lies in another place. Regarding security features, plans are for Spring.
#3. What plans do you have for the MIDAS token going forward besides buybacks? Will we see bonus rates for holders like NEXO and Cryptocom or any other new and cool innovations?
Trevor: The next step is to give you the possibility to swap rewards to Midas token for extra yield, while we transfer your actual yield to the liquidity pool, making Midas healthier each day.
#4. Can you share details on new tokens that Midas plans to support soon?
Trevor: Discussing within a team the potential list of 15 coins, which will be listed one by one. We are heavily looking into Fantom ecosystem tokens.
#5. How much capital do you guys have backed up in case of a loss?
The main reason for that is the extensive AUM growth. It will take some time for us to convert this value to the extra profits that are not reinvested in the growth of the company, but rather create the reserves.
Another thing is that the AUM growth happened on the market correction, so we have been really conservative with strategies we use in our portfolio.
#6. What are your thoughts on the current state of DeFi market? Do you think it will sustain or do you think it’s just another bubble?
Trevor: DeFi is not a bubble, but the innovative evolutionary tech layer boosted by inner currency mechanics and hype cycles. It will continue to evolve, liquidity will continue to move from the old projects to new ones
#7. Why is Midas so successful? Did it happen that the Midas team made bad decisions and lost founds of users?
Some members of our team were insulted by the amount of uncertainty that I threw at them. But there are no certainty in crypto and no easy decisions. The possibility to stay open and sit within fire allows you to make one decision that reality needs
Trevor: In the case of using Midas.Investments your crypto-risk is delegated to us. Basically, it is the best that we can handle risk better than the average crypto-investor.
We have 15 experts in our investment team that continually develop, test, manage positions, and search for new opportunities. I do not say that we are risk-free, but there is no such event that can lead to a major loss of funds in terms of investing strategies.
We are heavily diversified. We are entering and exiting mid-high risk strategies based on trend algorithms, which helped us to close most of the positions before the major drop last month.
I would also advise to not calculate risk as total but to decompose it. In terms of using Midas your risks are:
- hack of your account (Google 2FA and additional personal security measures come in Spring)
- hack of the platform to manipulate balances or abuse bugs (this event comes on our shoulders, not yours)
- hack of our infrastructure (we are using Fireblocks and hierarchy of multisig vaults)
- investment process failure (there is no current black swan event that can lead to major portfolio loss, liquidation or any sort of major event with portfolio)
This shows that the biggest risk is the hack of your personal account. Therefore, I would advise adding 2FA on your google or discord account and we will have you covered in a couple months with additional features to protect.
Trevor: We check the criminal records and recommendations from previous work
But every team has its own criteria to check if the person fits the team.
I personally like to give various cases to the candidate to see how broad and entwined his thinking process is. We can make a map together on miro or figma, which basically illustrates how a person’s neurons are tied up. There is a lot of space to play with candidates’ minds.
Another important part is the inner-culture vibe. We tend to be a more dynamic and adaptive team. There is no discipline, lack of hierarchy, a lot of freedom and self-governance. The person who gets to this organism is either sucked in for life or gets rejected after some time.
#10. What percent of Midas’s investment team’s ideas are approved or rejected?
Trevor: The team discussion of ideas usually happens after the major research by our analytics, so they are the first to throw away their ideas. So, we accept like 90%, but the position size usually changes based on the overall look of our portfolio.
#11. Does Midas have a due diligence process, such as meeting the development team of a defi project prior to placing capital with them?
Trevor: Our investment team makes due diligence to every protocol we are investing in.
Obviously, we are analyzing team background, wallets, tokenomics, hack events and how the team treated them, treasury and multisig of it, and so on. We have only started to meet the team, but I do not feel that this helps to reduce the risk of the protocol itself.
I personally trust protocols that got hacked but manage to flawlessly recover.
#12. What do you consider the biggest worry short term and how is Midas team dealing with this?
Trevor: Our current challenge is to go from a highly adaptive start-up to a more structured company. More developers, more products, more C-level employees, more work on licensing, GR, and so on. The challenge is to have a similar culture and dynamics, similar self-governance based on reality.