Elpis: A transparent AI futures and cryptocurrencies trading fund

Anyone that ever tried trading probably knows that among the most significant challenges posed is controlling one’s own emotions. Once the only solution was a strict trading discipline but more recently, trading based on statistical models has proposed what was believed to be a solution to this problem. According to the Elpis whitepaper, 1,360 hedge funds — almost 10% — are relying on large statistical models.

Such systems successfully exclude human emotion, but they are based on strong theoretical assumptions that fail at substantially reducing the risk. This issue is alleviated by the recent progress in AI that permits the design of systems that learn independently by examining incredible amounts of data.

Elpis brings AI trading to the retail investors

AI trading isn’t some fringe invention that no serious institution uses. It is quite the opposite. A good example is Goldman Sachs where in 2000 there were 600 traders.  Today, there are just two of them — and computer hardware. Such systems are cost-prohibitive to the average investor which grants an unfair advantage to institutional investors — an advantage that Elpis wishes to nullify.

Many seasoned investors reading this article are probably alarmed and thinking that this is just another ICO that promises easy money thanks to AI trading, but that’s not the case. I myself, when I have been proposed to write about an AI trading fund have thought “Well, it’s probably a scam.” That being said — after reading the whitepaper — I’m pretty much sure that it isn’t the case.

A provable successful track record

It seems that Elpis has worked with AI algorithmic trading since 2008 in the US equity and futures market — the company just recently started trading cryptocurrencies. The algorithms which Elpis proposes and wishes to improve upon on its new platform are the result of a decade of improvement. What’s more is that those algorithms have brought Elpis some outstanding awards:

  1. 2008, #2 Top Trader Futures +37.56% performance
  2. 2011, #1 Top Trader Futures +60,74% performance

According to the whitepaper — “Elpis’s US Equity models consistently beat the S&P since 2008” and:

“This model has been tested on the US market and is an improved quantitative version of the “Dogs of the Dow” trading model.

The main goal of this strategy is to track the S&P performance, or slightly over-perform the benchmark, with a much lower level of risk.”

The trading bot is active as we speak and on this telegram channel, it is possible to be informed about its trades as they are made. Below you can see some data that shows the performance of the Elpis trading AI:

Elpis US equities trading performance:

Elpis US equity trading performance

The maximum monthly drawdown (decline in value of the fund) has been reduced
from -37.26% to -1.45%, which is 25X smaller. In parallel, the Risk (volatility of returns), has been reduced from 21.09% to 6.05%, which is 3.5X smaller.

Elpis futures trading performance:

Elpis futures trading performance

The results show how this strategy has a high percentage of winning trades (64.63%), a great rate of return above 100% per year, while also controlling risk, and a run-up that is three times greater than the drawdown.

Elpis cryptocurrency trading performance:

Elpis cryptocurrency trading performance

The results highlight high profitability of 614% per year while keeping risk under control, with a run-up that is three times greater than the drawdown, showing an outstanding reward/risk factor in volatile market conditions.

Services offered by Elpis

Elpis has two separate offers for retail and professional/institutional investors. What is provided to the retail investors — which are defined by the whitepaper as investors with holdings ranging from $5,000 to $100,000 — are real-time trading signals generated by the AI. Those signals can also be “automatically integrated with other trading platforms through API” so that’s pretty much an advanced trading bot. Investors with holdings worth over $100,000 — that the whitepaper refers to as institutional or professional — have access to the same trading signals but also get shares of the Elpis fund.

Tokenomics

Token utility

The whitepaper explains that “investors will be able to subscribe to services in both BTC and ETH, such as the aforementioned trading signals, but holding ELP tokens (distributed during the ICO event) will grant them a 50% discount. ELP tokens are also the way to unlock services. Therefore it is fundamental to buy tokens during the ICO to access the fund or its algorithmic signals.”

To encourage investment and ensure that the token will see an increase in value the fund will use 20% of its trading profits to buy back and burn ELP tokens.

Token distribution

The total amount of ELP tokens that will be issued is 250 million. Of those tokens:

  • 87 million – ICO.
  • 25 million (equal to 10%) – Team members.
  • 58 million – Advisors and bounty
  • 80 million – Private allocation

ICO

The public sale will start start on 13th August and will be regulated by a smart contract written by FlashBoys — an independent company — to ensure a higher degree of fairness. The hard cap is $10M, and the amount of tokens available for sale is 87M, and any unsold tokens will be burned or recycled by CapchainX. Any ICO participant will be granted 1 year of free trading signals for both traditional markets and cryptocurrencies.

No date has been established yet for the start of the public sale, but the private sale is already open to anyone who is willing to invest $50,000 or more. Below are reported the bonuses and conditions of the private sale.

Transparency and regulatory compliance

The fund that Elpis is trying to create with the raised funds will be regulated by the Swiss institution FINMA. Elpis also claims that it ” follows securities law and is fully compliant with the AML (Anti-Money Laundering) norms, including KYC (Know Your Client) obligations, which are under the strict supervision of FINMA.”

What’s more, the whitepaper explains that:

“Because it is a coin that allows its holder to access a service offered by the issuing legal entity. Taking into account the given definitions and the meaning of the securities in Swiss law the ELP Token should not be considered as a security.”

To ensure the utmost transparency, Elpis will use blockchain to show every trade to customers and regulators publicly. All the dividends and costs — according to the whitepaper — will be calculated automatically without room for error. What’s more:

“Every transaction will be certified on the blockchain to recognize precisely what was invested and who holds the public ID wallet. This will allow us to easily and safely track each investor’s equity in the fund and the rewards/interests coming from trading activities.”

Bottom line

While there have been many shady AI trading funds and  ICO campaigns; the investment in which should be discouraged, this one seems fundamentally and distinctly different. The team behind this project has extensive proven experience in AI trading and already have a system that works that they only wish to improve further. The team also take good care of the regulatory aspect of the campaign by partnering with Goldblum and trying to ensure that the fund will be FINMA compliant.

Still, it is always highly advised that before taking any decision concerning any ICO investment to personally thoroughly research the subject and read the whitepaper.

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