May Service Fee Payments: Month 5https://medium.com/sharpecapital/may-service-fee-payments-month-5-bb3385125acbWe are delighted to announce that our fifth service fee payment and prize draw has been successfully completed as of 12th May 2018. The Sharpe Fund has performed remarkably well following a difficult open to 2018, achieving 26% ROI (year-to-date), despite the crypto market taking an approximately 25% hit. We are therefore very happy to announce our second largest service fee payment to date, coming in at $70,000 USD (equivalent, spot rate $700 USD/ETH) averaging $255 per sentiment provider, plus 10,000 SHP. This brings the total amount distributed since our product launch in December 2017 to $312,000 USD (equivalent) and 30,000 SHP.
If you missed some of our updates this month, we have outlined our thinking and investment thesis over the coming quarter in this article, and released an updated ledger for automated tracking of Sharpe’s proprietary investment activities across both crypto and equity markets.
There has been some interesting discussion within the community recently, on the role of media pundits, analysts and prediction markets — specifically relating to reputation. Sharpe published our mathematical approach to quantifying and immutably storing user reputation on the blockchain long before the debate had even begun. Sharpe differs from a prediction market, in that we curate sentiment on blockchain assets and equity markets, paying users an ETH service fee for each correct ‘prediction’. By coupling these payments with the users staked SHP (a metric for their confidence in the market and their own ability) and the users reputation (a metric that captures their long term, historical accuracy), we can understand what the market as a whole is thinking — producing contrarian market indicators from those with low reputations, and positive market indicators from those with higher-than-average reputations.
The Sharpe platform effectively incentivises users to provide honest data by rewarding users in proportion to their immutable reputation score. Users with the highest Sharpe reputation received a 20% premium on their service fees compared to those with the lowest reputations. We can see this in action by looking at the cents (USD) received per user, per correct prediction, per SHP token hold as a function of their reputation:
As our fifth month of distributing service fees draws to a close, we have seen the distribution between the highest and lowest user reputation scores continue to diverge, as those at both end of the distribution continue to move away from the mean. We have begun developing various metrics to ‘slice’ the sentiment data we’re collecting, as we now have over 1 million data points over a five month window on 600 assets across both equities and crypto. We will share more insights as we begin to understand the complex relationship between user reputation, time spent per prediction, and user proof-of-stake.
