Proof of Performance

Being able to prove the performance of an investment strategy is at the core of investing. Without it, creators of strategies can not be appropriately rewarded.

And at its core, AlphaCapture is built to allow anyone to prove the performance of their investment strategy.

It does this by using blockchains and utility NFTs to store, encrypt and define access control to the individual trades/signals that make up a strategy.

Our goal is for you to be demonstrate your performance over a lifetime of investing.

Investment Idea Proof of Performance

There are three simple steps in the process:

1. Creation of a 'new' Investment Idea

   • Investment Ideas are created in the form a standard utility NFT (ERC-1155)

   • The NFT created contains the details of an Investment Idea. In it's simplest form this is the equivalent of 'Open a new position in Microsoft'

   • By default, all data is encrypted using a key that you define

   • Smart contracts are used to validate the asset and the asset market price at the time of request

   • No quantity is specified; none is required for a signal and a percentage allocation is used in the context of a portfolio)

   • As long a market price can be requested from a verifiable source (such as an exchange or brokerage), any asset can be supported. This means that any asset class is therefore supported i.e. traditional equities, commodities, bonds etc as well as digital assets.

     • See more about how prices are requested

   • Access to the NFT is granted using share of token, meaning that during the creation process (or at a later point) you can specify a wallet address that becomes a part owner of the NFT.

     • See more about access control

2. Creation of the 'closure' of an Investment Idea

   • This is the equivalent of closing a position i.e. 'Close an existing position in Microsoft'

   • The NFT created for the closure is linked to the NFT created for the open

   • Smart contracts are again used to validate the asset and the asset market price at the time of request

   • By default, the closure request is not encrypted and contains a copy of the decrypted open request

     • Note that there are various options depending on your preference for transparency

     • Note also it is possible to adjust positons (increase or decrease position size)

3. Investment Idea Proof of Performance Summary

   • At this point, two NFTs have now been created - one to open the Investment Idea and one to close the Investment Idea eg.

     • Buy Microsoft - the market price offered by IEX (https://www.iex.io/) at the time of request was 390.00 USD

     • Close Microsoft - the market price offered by IEX (https://www.iex.io/) at the time of request was 400.00 USD

     • The ~2.5% profit can now be determined

   • The Investment Ideas have been stored on-chain and can be retrieved and verified by anyone without any interaction with the strategy creator

   • Data can be easily retrieved via the AlphaCapture SDK

Investment Strategy Proof of Performance

A strategy is a collection of investment ideas.

When creating an Investment Idea, the strategy details must be included and they are stored together with the Investment Idea details.

In this way, the strategy performance is the aggregate of all the Investment Ideas that have been closed.

Proof of Idea

Proof of trading signals, where there is no underlying trade

Proof of Trade

Creation of a signal generated by a real trade