Yield farming alternative Haru Invest leverages market inefficiencies through algorithmic trading – SlateCast #32 Liam ‘Akiba’ Wright · 2 weeks ago
For Investors looking for alternatives to centralized exchanges, Haru Invest may be a novel opportunity to earn yield during the bear market
26 min watch
Updated: November 2src, 2022 at 9:src5 pm
Haru Invest offers an alternative to yield farming by providing a custodial solution to leverage market inefficiencies through algorithmic high-frequency trading. Such trading strategies are often reserved for OTC trading firms and hedge funds. However, Haru leverages crypto markets to give access to retail investors.
Investors deposit crypto such as BTC, ETH, USDT, XRP, and USDC into the Haru Invest app available on Android and iOS, and funds are added to a liquidity pool which is then used to look for inefficiencies in the market. Strategies lean heavily on arbitration which is a method of buying and selling assets across multiple platforms where there is a discrepancy in pricing.
Speaking on the latest episode of the SlateCast, Haru Invest’s CEO, Hugo Hyungsoo Lee, discussed some of the specifics of Haru Invest’s trading strategy. Lee emphasized that Haru Invest utilizes strict risk management to ensure strategies are only exposed to the necessary counterparty risk of holding assets on an exchange.
The core strategies deployed by Haru Invest are
Arbitrage Trading that leverages the price gap between crypto exchangesMarket Neutral Strategy based on the price stability mechanisms at crypto futures exchangesSpread trading that focuses on the volatility of BTC/ETH futures contractsThe above techniques mean that it is possible for Haru Invest to generate profits even in a bear market. Still, no method of wealth generation can be free of any downside risk. It is important to remember that custodial services always come with the counterparty risk of not holding assets in a private crypto wallet.
However, the potential stress and technical knowledge required to participate in the current iteration of DeFi may deter some investors. Further, strategies such as yield farming need the investor to become exposed to the underlying assets. Therefore, a neutral approach such as those deployed by Haru Invest offers an alternative to entering into the world of DeFi or earn programs offered by centralized exchanges.
A prime example of Haru Invest’s risk management was their ability to exit positions on exchanges such as FTX before any funds were lost. In addition, Haru Invest operates a risk-scoring mechanism for exchanges to facilitate its strategies, meaning when risk levels increase, even profitable strategies are withdrawn if the stability of the underlying platform becomes untenable.
Earn potential on Haru InvestHaru Invest offers several earning opportunities to investors who deposit funds onto the platform. The base offering includes up to 6.5% APR, no lockup period, unlimited 24/7 withdrawals, and daily compound earnings.
The Earn Plus product offers up to src4% APR with flexible lockups from a minimum of src5 days to a maximum of 365 days. The Haru Invest team informed CryptoSlate on the latest episode of the SlateCast that the lockup periods are a requirement of specific strategies such as leveraging medium to long-term options.
A statement from Haru Invest shared with CryptoSlate stated
“Ensuring zero financial risk for our members is our first priority–which is why we don’t apply any high-risk strategies subject to the price fluctuations of the market.”
It is important to remember that no investment objectively has ‘zero financial risk’; however, Haru Invest’s commitment to this goal is paramount to its investment strategy. Assets not actively participating in trading strategies are held with BitGo, a crypto custodial solution used by many leading institutional players in the crypto industry. Further, Haru Invest boasts a strong security history as is noted on the website; “zero security breaches, zero withdrawal halt, earnings paid out src00%.”
More information regarding Haru Invest’s trading strategies is available on its website.
This article does not constitute financial advice. Due diligence on Haru Invest’s trading practices is limited to publicly available information, together with documentation provided to CryptoSlate by the Haru Invest team. Investors should be aware of all risks involved before investing assets with any custodial service.
