Sharpe Capital has developed a proprietary, automated quantitative trading algorithm driven by a hybrid machine learning and artificial intelligence model, bringing together microeconomic fundamentals, macroeconomic data, real-time world events, crowd-sourced market sentiment and NLP-driven linguistic analysis, into an overarching model capable of managing a robust, high alpha portfolio across various asset classes. Sharpe Capital will operate a proprietary investment fund operating much like an automated enhanced index fund to further generate revenue to support the SHP community economy.
The proof-of-stake metric allows us to infer the level of confidence that platform participants have in the sentiment they provide, which, when coupled with an immutable proof-of-reputation stored on the Ethereum blockchain, permits weighting of sentiment to determine both the size of service fees paid to each user, and the level of confidence to place upon each sentiment indication received. Through direct crowd-sourcing of participant sentiment, we can ensure our automated models continue to capture human, affect-driven & cognitive processes, in addition to microeconomic fundamentalist and linguistic analysis based asset value forecasting. This is unlike a prediction market - there are no losses for incorrect predictions, merely a reduction in the user’s immutable reputation score, and consequently, the size of future payments. Likewise, consistently accurate users will increase their reputation, earning larger and larger payments in exchange for their insight. SHP also provides a mechanism for hedge funds and institutional participants to access our proprietary models, acting as a usage fee.
Utilising blockchain technology serves two additional purposes for Sharpe Capital: to create a decentralised, ‘trustless’ immutable trade ledger, such that any individual can view all our previous trades and fund performance with absolute con- fidence. This eliminates any dependency on trust for fund disbursement, and any possibility of fund manipulation at an institutional or individual level; to permit unrivalled community governance using both consensus-based and democratic votebased governance models enabling the community of SHP owners to determine the direction of Sharpe Capital’s future.
The Sharpe Financial Markets Protocol aims to describe a new gold standard for hedge fund management, leveraging blockchain technology to provide a low barrier to entry, continuous liquidity, anti-corruption protections, international access and optimal risk-adjusted returns. Our longer term goal, therefore, is to develop the Sharpe Crypto-Derivative (SCD) token, subject to necessary approvals. This first-inclass token creates the foundations for a solid link between blockchain assets and the global economy, and will ultimately provide possible payment of dividends to participants. Through our community governance structure, in which SHP holders have the right to table and vote on motions which guide the direction of Sharpe Capital, we ultimately aim to deliver a suite of investment products with various risk profiles and across multiple asset classes, including blockchain assets. The timeline for SCD issuance is Q1 2019. An independent crowd-sale will be held for the issuance of SCD tokens, from which 100% of the proceeds will be directly invested using our proprietary trading technology.
In light of the many corrupt or ethically questionable practices in the industry, leading to disasters such as the collapse of Barings bank and the $2bn loss by UBS due to a single rogue trader, we are making the technology underpinning our Financial Markets Protocol freely available for any corporation or fund to use internationally. Our grand vision is to eliminate corruption in global financial markets while still protecting each individual corporation’s proprietary information. This technology permits any institution to be instantly audited by any member of the public or regulatory body. Ultimately, the Financial Markets Protocol demonstrates how we, as a society, can eliminate financial malpractice in our lifetime through widespread adoption of Sharpe trustless ledger service technology, putting an end to ’man-made’ economic disasters, and help stabilise global economies; ultimately, for the benefit of all people.
