A Monthly Report to Remember: May 2022

A snapshot of the books and our market outperformance :open_book:

Welcome to the SW DAO transparency report for May 2022. In this document, we will take a look at our Products [out]Performance, the Treasury balance sheet, as well as expenses. Transparency and accountability are at the core of what we do. Thanks for your continued support as we work towards building a better future for personal investors.

Our Treasury balance sheet as of May 31st shows that we have a liquid treasury of $180,990.50 with 100% being held in our interest-earning SW Yield Fund. You can find a detailed breakdown of our assets and income down below.

Looking ahead to June, we will be launching our long-awaited dApp on the 8th and Bonds on the 15th. We are confident that our soon-to-be-released products will meet or exceed your expectations and help you achieve your financial goals. Thank you again for your support, and we look forward to serving you in the future.

Benchmark Outperformance

The April 1st launch of our new tokenized algorithms coincided with a period of volatile markets, and our systems have outperformed their respective benchmarks during this time. Most investors have lost upwards of 30% or more of their portfolio value, but our automated systems have preserved capital with some soon set to deliver positive returns. We are thrilled about the performance of our automated investing systems and look forward to introducing more members to the benefits of these strategies.

Our machine-learning-based strategies are designed to capitalize on market opportunities and minimize risk, and they have done that successfully to date. Our best performer of the new batch, Quantum Momentum ETH is only down -4.04% while its benchmark declined by -40.94%. Our automated strategies have consistently outperformed the market, even during volatile periods. This is thanks to our state-of-the-art Machine Learning overlays, which are constantly being updated to take into account changing market conditions and evolving datasets.

We believe that automated investing is the future of wealth management. With our automated systems in place, you can stop staring at charts and start enjoying your free time. If these strategies outperformed your personal account over the past two months, it’s time to reconsider why you are spending your time behind the computer screen looking at charts. With our systems in place, you can rest assured knowing that your investment portfolio is in good hands.

May 2022 Income Statement

The treasury income sheet is an important part of our commitment to transparency and accountability. It shows our current financial situation, as well as how we can meet future financial obligations.

Our treasury balance for the month of May was $180,990.5, a decrease of $1,743.5 from the previous month. This is due to our DAOs payout of April and May dividends this month alongside SWIP-07.

On the income statement, we saw a decline in the book value of SWD liquidity provisions, from $46,000 to $32,000. This is due to a large decline in the market price for MATIC during the month. As we move to a blended asset liquidity backing with our new Balancer Pool in June, the volatility of our liquidity provisions will decline.

Overall, our financial position remains strong despite the slight decrease in treasury balance, the book value of our liquidity provisions, and the volatile market conditions in May. We are confident that our new Balancer Pool will provide more stable liquidity backing for SWD tokens and will help to reduce downside volatility going forward.

May 2022 Expenses

May was a month of reduced expenses for the SW DAO team as we focused on working with in-house developers to finish our dApp and do ongoing development. Our largest expense was the dApp bond page, which will soon be integrated with our dApp to provide deeper liquidity for SWD tokens. A one-off expense for SW Ventures NFTs was incurred as we work through the initial developmental foundation for that company. All told, our expenses for the month came to $27,411.50. We’re confident that this reduction in expenses is sustainable as we continue to focus on efficient development and cost-effective operations.

June 2022 Anticipated Expenses

SW DAO is rapidly approaching the payment milestone for the Robocat design team for the second half of 2022. The Founding Team is looking at solutions to cover this large expense, which currently includes additional fundraising efforts and/or the use of SW DAO treasury funds via a SWIP vote. Development expenses for June are expected to be lower than usual, as internal compensation will be paid in SWD out of the founding team’s allocation. Marketing and Community management expenses are to be limited to under $9,000 until we raise outside capital and have more cash for such expenses.

New Product Performance

On April 1st, SW DAO launched 6 new tokenized automated investing strategies. All 6 of these strategies have outperformed their respective benchmark since their launch. Quantum Momentum ETH is our best performing strategy, beating the benchmark by an absolute 36%.

Overall, in a negative month for the market, all 8 of our public products outperformed. Our product performance is a result of our sophisticated algorithms that are able to adapt to evolving market conditions as publicly proven here. Our algorithms have been carefully crafted and tested by our team of experts, and we are confident that they will continue to outperform the market.

Starting in June, we will be aggregating SWYF and SWAP into this table to provide a more comprehensive view of all our product’s performance, their active address count, and their total value locked. This will also be the first month of comparison of TVL, and active addresses to the previous month for the 6 new products. This will allow us to more easily track our progress and growth month over month. Additionally, it will provide valuable insights into which products are being used the most and which may need more attention. As always, we appreciate your feedback and suggestions.

Please note there were some issues with the Discretionary Sets and even though they outperformed the market, they were not hooked up to the execution system properly during a brief period. The founding team will likely re-deploy them to reset their history in the coming month.

SW Alpha Portfolio

The SW Alpha Portfolio outperformed Bitcoin by an absolute 29.75% in the month of May, with a return of +12.75% compared to Bitcoin’s -17% decline. Funds under management grew from $46,092.14 to $55,610.47 over the course of the month, and active addresses stayed stagnant at 18.

Market outperformance was generated by holding SWD tokens which appreciated greatly in the month of May, counteracting the MATIC spot exposure the fund had.

The SW Alpha Portfolio is a digital asset hedge fund that employs a bottom-up approach to investing in the cryptocurrency markets. The fund seeks to generate alpha through a combination of long-term investments in blockchain projects with high growth potential and active management of short-term trading positions.

SW Yield Fund

The SW Yield Fund is pleased to announce that in May, the fund appreciated by 1.04%. The NAV per token increased from $1.173 to $1.1852. The total NAV of the fund increased from $370,414 to $381,970.73 during this period, an $11,556.73 increase. There are currently 31 unique Polygon addresses holding SWYF, an increase of 5 from last month’s 26 addresses.

We would like to thank our investors for their continued support. We remain committed to providing consistent returns and increasing the value of the fund at the safest rate possible when yield farming in the current market conditions.

Going Forward

May was a month of stellar market outperformance for all 8 of our publicly available trading strategies. We have many more strategies ready for investors that will soon be available at our June 8th dApp launch. If you are spending your time behind the computer, only to underperform the numbers you have read today, consider learning more about our products and giving them a try.

In June we are beginning the design and build-out of our white label dApp and will be going live in July with these product offerings for our partner’s investing community. We look forward to a rapid expansion of TVL to many of these products that have proven their worth to personal investors.

To date, we have outperformed the market since many of these products’ inception. Our eight strategies are available to view on our GitBook and website, with explanations of how they work. Each algorithm is designed with a different risk appetite and return objective in mind.

For example, our Yield Fund strategy aims to provide downside protection during market sell-offs while still harvesting stable farming yield, while our Quantum Momentum strategy looks to capitalize on both rising and falling markets based on high-frequency trading.

We invite you to learn more about us and explore our products ahead of our June 8th dApp launch. Our products are designed to help you improve the performance of your portfolio and give you the tools you need to succeed.

Thank you for your time, please join us on Discord to learn more.

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