Yield farming alternative Haru Invest leverages market inefficiencies through algorithmic trading – SlateCast #32

Haru Invest provides an alternative to yield farming by providing custodial solutions that exploit market inefficiencies through algorithmic high-frequency trading. Such trading strategies are often reserved for OTC trading firms and hedge funds. However, Hull is leveraging the crypto market to provide access to retail investors.

Investors deposit cryptocurrencies into the Haru Invest app, available for Android and iOS, and the funds are added to the liquidity pool and used to look for market inefficiencies. The strategy relies heavily on arbitration, a method of buying and selling assets across multiple platforms with price discrepancies.

Talking about the latest episode of Haru’s CEO SlateCast, Hugo Hyun Seung Lee, explained Hull’s trading strategy in detail. Lee emphasized that Haru utilizes rigorous risk management to ensure that the strategy only exposes him to third-party risks necessary to hold assets on exchanges.

The core strategies deployed by Haru Invest are:

• Arbitrage Take advantage of price differences between crypto exchanges
• Market neutral strategy Based on crypto futures exchange price stabilization mechanism
• spread trading Focus on BTC/ETH futures contract volatility

The above techniques mean Hull is capable of generating profits even in bear markets. Still, no wealth generation method is immune to downside risks. It is important to remember that custody services always carry the third party risk of not holding assets in a private crypto wallet.

However, the potential stress and technical knowledge required to participate in the current DeFi iteration may deter some investors. Assets must be exposed. Therefore, a neutral approach, such as that deployed by Haru Invest, offers an alternative to entering the DeFi world or earning programs offered by centralized exchanges.

A classic example of Haru Invest’s risk management was its ability to exit positions on exchanges such as FTX before the funds were lost. Additionally, Haru operates a risk scoring mechanism to drive the exchange’s strategy. This means that as the risk level rises, even profitable strategies will be withdrawn if the underlying platform becomes unsustainable.

Haru Invest Potential

Haru offers several earning opportunities to investors who deposit funds into the platform. The base offering includes his APR of up to 6.5%, no lockup period, unlimited withdrawals 24/7, and daily compounded earnings.

Earn Plus products offer up to 14% APR with flexible lockups from a minimum of 15 days to a maximum of 365 days. The Haru team informed his CryptoSlate in the latest episode of SlateCast that the lockup period is a requirement for certain strategies such as leveraging medium- to long-term options.

Haru’s statement shared on CryptoSlate said:

“Zero financial risk for our members is our top priority. That is why we do not apply risky strategies that are subject to market price volatility.”

It is important to remember that no investment is objectively “zero financial risk”. However, Hull’s commitment to this goal is paramount to its investment strategy. Assets not actively participating in a trading strategy are held at BitGo, a crypto custody solution used by many leading institutional investors in the crypto industry.

This article does not constitute financial advice. Due diligence on Haru Invest’s trading practices is limited to publicly available information along with documentation provided by the Haru Invest team to his CryptoSlate. Investors should be aware of all associated risks before investing in assets with custody services.