Discussions-to: Alternative Honeypot Strategy - A Simplified Approach
Created: September 7, 2021
This BIP Proposal is suggesting an 80% Honeypot allocation into the three pillars of the crypto space: NFTs, DeFi, and the Metaverse. The remaining 20% of the Honeypot is kept as cold ETH in our Spending Reserve. Our Honeypot Strategy is subject to quarterly reviews, with the first review being held in Q1 2022. The specific details of this strategy, in addition to allocation percentages, are provided herein.
Upon community approval, the following Honeypot allocations will take effect:
At the start of Q1 2022, a review for on our Honeypot Strategy will be held. The exact details of what this review entails is beyond the scope of this BIP Proposal. More than likely, a Treasury Committee will be responsible for this review. The point being is that this Honeypot Strategy will be reviewed and adapted, if need be, to be sure it is capitalizing on market trends within the crypto space and reflecting community sentiment.
Currently, our Honeypot lacks a calculated investment strategy. With no strategy in place, our Honeypot portfolio could fall victim to capital losses, suffer from poor performance, miss out on maximizing upside, and/or lack any kind of hedge against market downturns. Reasons for this: over allocation into any one area, under allocation into any one area, and lack of diversification. Furthermore, a lack of strategy is a lack of focus for the community.
By limiting allocation amounts into the three pinnacles of the crypto space - NFTs, DeFi, and the Metaverse - we prevent ourselves from falling into the trap of over and under allocation. Likewise, by investing the Honeypot into these three areas, we are practicing a form of diversification. The performance of our Honeypot portfolio, as a result of having exposure in these three pillars collectively, will outperform any single one of these pillars separately. The reason being is simple: the sentiment in these areas shifts among the crypto community. Each one of these areas takes turns getting hot and thus should maximize our upside. Keeping 20% of our Honeypot in a Spending Reserve gives us ample opportunity to buy dips, help stabilize against NFT, DeFi, or Metaverse volatility, and allow us to fund future initiatives.
This BIP Proposal is a culmination of sentiment among members in the form of feedback, in addition to my own opinion backed by my own investing experience and knowledge. A Honeypot Strategy is not a luxury we can afford to go without. It is a necessity. A well calculated Honeypot Strategy should maximize upside, limit risk via diversification, and provide the community some focus by setting allocation limits. The community voiced their opinion for a need of such a strategy while remaining simple. I present [BIP-003] Our Honeypot Strategy - A Simplistic Foundation.
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