AhrvoDEEX

AhrvoDEEX is a peer-to-peer decentralized equity exchange that enables profitable trading by using multifactor ranking systems and deep learning algorithms that create smart equity scores and price targets to streamline the decision-making process.

Problem

Clearinghouses and other intermediaries are bottlenecks that limit order-matching transparency and settlement speed. Wall Street analysts lack objectivity and produce inaccurate equity ratings and price targets, leaving traders and investors without a roadmap to evaluate equities.

• Public equities settlement speed has averaged two to three days since the 1970s. Central depositories and stock exchanges have consolidated power.
• From 1981 to 2016, the top 10 percent of stocks that analysts were optimistic about generally performed worse than the 10 percent of stocks that analysts were pessimistic about.
• Over that time period, stocks that analysts were pessimistic about gained 15% in excess return over the following year when compared to the stocks that analysts were optimistic about.
• Only 5% of S&P 500 stocks were rated sell in 2018 (According to Factset).
• More than 1/3 of brokerage revenues earned in 2016 came from institutions looking for access to the C-Suite (According to Greenwich Associates). Furthermore, a large portion of an analyst’s compensation is often tied to their ability to develop, nurture, and maintain these relationships.

Opportunity

AhrvoDEEX platform will trade traditional equities, not tokenized equities. Our focus is on accelerating the adoption of blockchain within equity markets by integrating into the brokerage system. As a result, AhrvoDEEX can onboard clients from traditional brokerages through the automated customer account transfer system (ACATS), providing access to trillions in brokerage assets from inception. This allows the network to scale due to the ease of adoption- users can roll over existing brokerage and retirement accounts without liquidating their portfolio.

• Global equity market cap is ~60-70 trillion USD (the U.S. is ~35-40%) vs. cryptocurrency market range of ~200-250 billion USD (ease of adoption and scale)
• The US brokerage industry revenue has grown 16 percent since 2013 from $264.2 to $308.6 billion. Profit growth jumped 48 percent over the same time period. (large market opportunity)
• The global fintech blockchain market had a total value of 204 million US dollars in 2017. It is expected to reach ~8.3 billion USD by 2024. A compounded annual growth rate of 70%. (strong secular tailwind)
• In 2017, 23% of the surveyed financial companies were planning to use blockchain technology for clearing and settlement of securities (no solution like AhrvoDEEX on the market)
• Ally Invest conducted a survey that found, 75 percent of millennial women and 60 percent of millennial men find investing confusing. (Millennials are set to inherit $30 trillion in the US alone)

Solution

AhrvoDEEX is a blockchain based peer-to-peer equity exchange (broker) being developed that enables profitable trading by using multifactor ranking systems and deep learning algorithms to create smart equity scores and price targets to streamline the security selection and portfolio construction process. Outside of custodial services, our focus is to build network liquidity, white label solutions, APIs and SDKs, and it will be provided to startups and fintech companies. AhrvoDEEX transaction speed is comparable to centralized exchanges (1-3 seconds) and much faster than Ethereum DEX (~3 minutes) and Bitcoin (~10 minutes). Transactions on AhrvoDEEX settle in ~3 to 5 seconds.

Competitive Advantage

Patent Protection

Ahrvo is building the first blockchain-based decentralized equity exchanged powered by artificial intelligence. Over the past two years, Ahrvo’s management team has garnered the necessary protection for its growing suite of investing and trading solutions. Ahrvo has filed two provisional patents (March 2017/November 2018) and one utility patent (March 2018). Pending patents cover existing and upcoming products and features that are under-development or slated for release. In addition, native aspects of the network’s protocol and integration of multifactor ranking systems and neural networks into a peer-to-peer equity exchange are covered.

Traditional Broker Experience

An advantage of being a traditional broker instead of a tokenized exchange is the ability to custody and onboard traditional equities. Tokenized platforms frequently state, “we are only a software firm and do not participate in regulated activities such as custodial or clearing services, order execution, investment advice, asset management, and other such financial services.” We believe this is to their detriment. Ahrvo’s custodian platform will offer front and back office services for firms. By focusing on a larger market (equities vs. cryptocurrency), Harvard growth should exceed tokenized competitors.

Competent Blockchain Developers

Ahrvo is working with a seasoned team of blockchain developers. The development firm is CMMI Level 3 and ISO 9001: 2015 Certified. In total, we have access to a team of 35 blockchain developers but will be working with a team of 4-5 developers initially. Their experience includes: launching public and private blockchain by forking, creating native coins, changing specifications like reward logic, inflation rate, and configuring mining tools.

Infrastructure

Current market participants (mainly Ravencoin and Equibit) are forks of Bitcoin. We view this as a structural impediment given the nature of the industry (high transaction volume). The consensus protocol of their blockchains is Proof of Work (POW). In POW, miners require a lot of energy to validate transactions. The implicit and explicit cost associated with bitcoin-based platforms has become apparent when transaction volumes rise with the price of the underlying cryptocurrency. Ahrvo’s blockchain will be forked from Stellar, and use Proof of Stake (POS) - a more cost-efficient and environmentally friendly consensus protocol.