Insights are highly specific, targeted, and personalized intelligence generated by Loch's algorithms. These are designed to help you minimize transaction costs, reduce risk, and increase yield without raising risk levels.
There are three categories of insights: cost reduction, risk reduction, and yield increase.
Loch identifies ways to reduce your transaction costs.
- It's impossible to time the market and predict the right entry price consistently and accurately. So we don't try to do that.
- Instead of predicting the market, we identify periods when gas costs or network fees are at their lowest.
- Gas fees are essentially paid to miners as incentives to prioritize transactions for inclusion in their hash.
- These network fees are influenced by the demand and supply of block space.
- Loch identifies periods when block-space demand is low, suggesting an optimal time for transactions if your goal is to minimize gas fees.
Decentralized finance and crypto are fraught with substantial risk. We categorize and identify these risks for you. Here are some examples.
- Token float risk: Loch informs you if the circulating supply of a token in your portfolio is significantly lower than the Fully Diluted Valuation (FDV). A low circulating supply to FDV ratio could suggest that the price might plummet once insider shares unlock, assuming the demand for the token doesn't keep pace with the increased supply.
- Borrower risk: Loch informs you if the Loan-to-Value (LTV) ratio of your loan is nearing the required collateral threshold. Loch continuously tracks the exact ratio required by your pool and compares it to your current borrower ratio.
- Unlock risk: Loch notifies you if a token you own has an upcoming supply unlock, which could indicate insiders preparing to sell. You don't need to manually monitor token unlocks. Simply add your addresses to Loch and enjoy peace of mind.
- Concentration risk: Loch warns you if the majority of your assets are held in a single wallet or dApp. It's crucial to distribute your crypto holdings across multiple wallets, as Satoshi suggested in his blog posts. This isn't advising diversification of holdings, but rather the number of wallet addresses.
- Market cap risk: Loch alerts you if your portfolio contains a token with a market cap of less than $100m. This could imply significant slippage and volatility. Low market cap coins are especially prone to disruption from whale movements.
- Staking risk: Loch warns you if more than 40% of a token is staked. This presents another form of concentration risk. Staked assets aren't the same as base assets. There could be a smart contract vulnerability, the pool could be rug pulled, or the validator slashed etc.
- Discoverability risk: Loch lets you know if more than 10% of your portfolio is invested in a token ranked outside the top 100 market cap on CoinGecko or CoinMarketCap. These tokens may be difficult for most traders to discover.
- Lender risk: Loch alerts you if over 50% of a certain asset is lent out on one platform. This is a unique form of concentration risk. The platform might have a smart contract vulnerability, or the pool could be rug pulled.
Loch identifies opportunities for you to earn yield on idle assets in your wallet.
- It's important to note that Loch's algorithms are extremely careful not to recommend assets that would increase your risk level.
- Loch only identifies yield opportunities from platforms you're already using.
- For instance, if you're already earning yield on some asset in AAVE, Loch will suggest that your idle Matic could earn x% APY if deposited there.