Design Notes - Auto-Balancing Token Bundles

General
1

Algorand has a wonderful ASA (Algorand Standard Asset) community - from meme coins to utility tokens and governance, there is something for everyone. However, taking a position in an asset along with a number of others can be difficult to manage so we at CompX Labs are creating something that should make that easier.

What are Bundles?

Bundles of any form are something we’ve wanted to introduce for some time. The thought behind it is to make multi-step processes simpler with the aim of achieving our ‘one-click-defi’ goal.

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Bundles of any type - token, farm, lp etc - all have a set of specific rules which govern how we develop them.

  1. Users can start with any token. If you have Algo, USDC, Coop or something else, it’s all the same to our bundles. Any token can be used to create a bundle, as we will use our CompX Swap router to efficiently swap into the bundle tokens as needed.
  2. Transparent Fees. We all know that blockchain actions incur fees so we want to be up front on any fees that will be incurred through bundles so that users can make decisions with full knowledge.
  3. Customisable parameters. Users should have control over how their tokens are used. This can be in the form of how often we rebalance the bundle, what the ratios are between tokens in the bundle, what happens with rewards/fees earned (in the case of LP and farms).

So, Auto-Balancing Token Bundles…

ABTBs are the first step in our bundle based journey and will allow users to gain positions in a number of tokens via an easy to use interface, low number of transactions and transparent fees. These bundles will balance their ratios at a configurable rate - from hourly to once per day - allowing positions to be as accurate as users like.

How do they work in practice?

For the initial rollout, bundles will not be permission less and the bundle setup will be done by CompX Labs. As the feature is used and we gain feedback and refine them we can move to a permission less model in the future. We plan to offer to two ABTBs to begin with - a stable coin focussed bundle and a community coin focussed bundle. We want to offer a low risk and higher risk bundle to gauge interest one way or the other.

  1. User brings a token, let’s say Chips for this example. They have $1000 worth.
  2. They want relatively low volatility so they choose the stable bundle - made up of USDC, USDt, xUSD and EURs.
  3. The bundle has the following ratios - USDC 40%, USDt 30%, xUSD 15%, EURs 15%.
  4. The user selects their rebalancing rate at every 6 hours.
  5. User must deposit ALGO to the contract to allow for rebalancing, the fees for this are transparent and can be topped up at any time (just like our farms)
  6. User enters the token and amount to deposit - $Chips $1000 worth.
  7. When they click “Create Bundle” the CompX Swap router takes the Chips tokens and swaps to the bundle tokens in the ratios described - $400 USDC, $300 USDt, $150 xUSD and $150 EURs.
  8. And that’s it - users can check their bundle tokens via our portfolio page and update their ALGO fees and configure their rebalancing rate whenever they wish.

Fees

  1. Platform management fee - 0.5% of total bundle value per month (Paid in Algo)
  2. Transaction fees to allow rebalancing swaps (Paid in Algo)

We hope you like the above design and are as excited as we are to start the bundle journey. Look out for our coming designs for Farm bundles and LP bundles. As always, feedback is appreciated!

2 Likes
2

What is the idea of stable coin bundle? Will you deposit those tokens into LP, Folks Finance or farms somehow?

Genuinely curious what is the benefit of holding them other than “fuel” for future investments.

Best regards,
ROAM

3

It’s something that could happen in the future - for right now, V1 is simply making it easier to gain balanced positions in a number of tokens.

I did have the thought of then creating a token representing your bundle position - which could then be further used in Defi - but maybe at a later version.

1 Like
4

Ok. In V2 or later versions good to add some automated earning mechanism, because now maybe better to just deposit into Folks Finance. But happy that you will introduce this first version and to get things rolling.

Regards,
ROAM

5

For sure - the farm and lp bundles were planning are far more exciting but this one paired with a DCA contract could be fun

1 Like
6

Perhaps I’m just not grasping something, but what is the real value here to the user? Why not just swap your assets to the coins you want and be done with it (without paying management fees)? Why would I want to keep rebalancing and incurring more fees?

7

If you wanted to keep your token positions at a specific ratio. Wanted easy access to a number of assets in one go.

For sure you could do the swaps and/or balancing yourself but it’s the convenience factor firstly.

These bundles open up the door for further additions - dca, lsts etc.

People have requested the feature and I think we can do some interesting things.

8

Can you expand on this? I’m not trying to poo poo it. I’m just genuinely trying to understand what the draw is.

1 Like