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description: Demo strategy
---

# All Terrain Portfolio

## Assets

[$PAXG](https://polygonscan.com/token/0x553d3d295e0f695b9228246232edf400ed3560b5)

[$WBTC](https://polygonscan.com/address/0x1bfd67037b42cf73acf2047067bd4f2c47d9bfd6)

[Treasury Bills](https://polygonscan.com/token/0x408a634b8a8f0de729b48574a3a7ec3fe820b00a?ref=app.rwa.xyz) → [Franklin Templeton Onchain Money Fund](https://app.rwa.xyz/assets/FOBXX), $2.1M TVL in Polygon

## **Motivation**

DeFi is currently an isolated house of cards, where each card is a high risk asset with direct correlation and backing with all other assets. And high risk assets only perform well in one market condition, and that is one with expectations of low interest rates in the short-medium time horizon.

When the FED turns hawkish, crypto investors have to safeguard in stablecoins, risking the constant inflation depreciation, or actively managing DeFi positions.

No deposit and forgive solution exists in DeFi that passively manages your assets on a wide range of market conditions.

Stratify with its natively created strategy, ‘**All-Terrain Fund**’, solves it.

## **Rationale**

Finance is a constant battle where market conditions move valuations no matter the asset fundamentals.

The most important variables are:

1. Interest rates → Stronger USD
2. M2 money supply → Demand unaccompanied leads to weaker USD
3. Inflation → Interanual measurement of cost of life increases

Markets are constantly fighting over liquidity, a direct increase of it, rises ‘high risk’ asset valuations, [M2 money supply](https://fred.stlouisfed.org/series/M2SL) is the best indicator for liquidity.

Interest rates make liquidity flow from markets to US Treasury bonds, since its counterparty risk is considered close to risk free.

This makes Treasury bonds valuation increase, while all other assets, specially ‘high risk’ ones, like all cryptocurrencies, heavily depreciate.

Meanwhile, inflation is an indicator of USD purchasing power depreciation, and can be hedged against adquiring safe-heaven assets with limited supply, like Gold and BTC. Specially Gold, if interest rates are lower than inflation, since investors historically safeguard against financial repression adquiring gold.

Being Polygon the [4th biggest blockchain by tokenized government securities](https://dune.com/21co/tokenization-government-securities#3-breakdown-of-tokenized-government-securities-by-blockchain), standing at $11M TVL and also natively issuing tokenized gold via PAXOS it is a perfect choice for executing the **all terrain investment strategy**.

## **Technical**

### **Overview**

**+ Δ IR / INFLATION → From BTC to T-BILLS and GOLD, prioritizing buying T-BILLS**

* **Δ IR / INFLATION → From BTC to T-BILLS and GOLD, prioritizing buying GOLD**
* **Δ M2 → From T-BILLS to BTC and GOLD, the buying ratio depends on current IR, higher IR will buy more BTC (we’ll need to model math function)**

**- Δ M2 → From BTC and GOLD to T-BILLS, the selling ratio depends on current IR, higher IR will sell more GOLD (model function)**

### **Detailed**

Jupyter Notebook document with **Function Formulation**, **Mathematical Function**, its **Typescript representation** and its **2y/5y backtesting**.

* [Quant Analysis](https://github.com/xRozzo/Stratify-Chainlink/blob/main/strategies/src/all_terrain/allTerrainStrategy.ipynb), request for access to the repo [here](https://www.linkedin.com/in/alex-arteaga-c/)
