Investment Outlook for $aSHIB: Where does the value come from?

illustration of aSHIB price history

The below letter was addressed to the Algorand based asset AlgoShibaInu aSHIB community.

Dear aSHIB army,

In this post, we examine the current status of our vast Liquidity Pools and explain our current strategy to make a dent in Tinyman.

Idea for growth on Tinyman

The idea is simple. Every token maker comes on Tinyman and makes huge Liquidity Pools with ALGO and maybe some smaller pools with USDC and YLDLY but largely ignores investing in liquidity pools with the other ASAs due to lack of enough volumes on those pools. This makes everyone trade ASAs mainly through ALGO.

So ASA like OPUL and YLDLY may lack enough liquidity in their direct pairs due to more people preferring OPUL/ALGO and YLDLY/ALGO. For example, OPUL/ALGO has $1.3M, YLDLY/ALGO has $2.37 M , but OPUL/YLDLY has only $4.8k. Do you see the big difference in millions and thousands?

What if aSHIB could use economies of scale (availability of cheap aSHIB) to build broad LPs and help OPUL/YLDLY trade with some extra liquidity via aSHIB?

Hence, we have a huge opportunity for arbitrage trading here between the numerous ASAs if we could build our liquidity pools unlike others concentrated mainly on ALGO, but try to spread it out across top ASAs. So we experimented in building such a portfolio of LPs.

$aSHIB Portfolio of Major Liquidity Pools paired with ASA worth 2,324 ALGO or $4,439. Total Value of LPs is two times: 4,648 ALGO or $8,878 as of 18th November, 2021
$aSHIB Portfolio of Major Liquidity Pools paired with ASA worth 2,324 ALGO or $4,439. Total Value of LPs is two times: 4,648 ALGO or $8,878 as of 18th November, 2021

Results of implementation of idea


If this can boost transactions on the Liquidity Pools, aSHIB can earn the above ASA on each trade. Imagine 0.25% * 5/6 of trade volume getting added in our pools at 100 transactions of 200 million $aSHIB each an hour during peak times! This is just within the first 18 days of launch and the first 3-4 days of implementing our Liquidity Pool strategy in a strong manner. See below figure on how without any new airdrops, we have leveraged on the LPs for increasing transactions.

The more volatility in the Algorand ecosystem, the better for aSHIB. Every time you see a frustrating ALGO price go up and down, you can feel reassured that if you are invested in aSHIB, you just earned a whole range of above Algorand ASA on the increased trades.

My favorite moment was watching our OPUL and USDC/USDT gain in the pools when Algorand price rose on 17th November, 2021.

Transactions count of $aSHIB

The Future

A lot of activity is gaining ground in aSHIB . But I shall just focus on the investment part of aSHIB in this post.

Growth in aSHIB hence will come from one guaranteed source from the trading activity and the volatility in the ASA market. This will increase our hold of the ASA in our LPs and further increase trades in a virtuous cycle.

Once you become the size of AKITA, it becomes difficult to build those new pools to compete with your ALGO pools without selling some stake. In the case of aSHIB, growth will come in all the pools and hence we will see steady growth over time. We may not grow too quickly, but when we grow to AKITA´s size we will be in control of most trades between ASAs on Tinyman because our entire portfolio grows along.

Every big purchase of aSHIB with ALGO leads to purchases across the pools, hence we may not rise too quickly but we will also not fall too quickly.

Even if say one of the biggest Whales with little interest in long-term growth sells his 20 billion $aSHIB all at a go in the ALGO pool, he will create a 10% dent to the total 200 billion stake in the LPs. The price vs ALGO may fall big and it will quickly be arbitraged from the assets in the other LPs, making only a net 10% impact on price.

Hence, the key to our current growth comes from increased transactions. As long as those statistics keep rising, you can be assured that all is going well with aSHIB.

Do you know or hold any good ASA that we dont have in our LP?

Make a LP with aSHIB and help us fix the problem of liquidity between non Algorand assets!

Your comments and feedback are warmly welcomed!

Kind regards,
Vin the aSHIB Whale aka MilanKaRaja

This was originally posted on the Reddit group of the AlgoShibaInu. Ever since, aSHIB has evolved.

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Author: Vineeth Naik

Liberal part time Blogger and full time Researcher with a broad range of experience, professionally and personally in Austria, Italy, UAE & India. Loves Finance, Business & Technology. Cares about society.

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