Crypto bull runs are like euphoric cult parties. Humbleness, stoicism, fundamentals and any left-over sense of risk management 101 go out the window.

It’s all rockets flying to the moon that eventually crash, not only at the expense of novice retail but recently including the likes of seasoned pros running billion-dollar funds. 

Ultimately, all humans give in to the barbaric euphoria that is in our nature, making strategies like DCA (Dollar Cost Averaging) and portfolio diversification essential to keep our finances separate from our inner demons.

In this article, the emotional woes of crypto investing are discussed and a novel decentralised DCA solution built on Kujira is introduced as a solution to dampen crypto crashes while ultimately reducing the need for crypto regulation.

We’ve all bought the top at some point

Buying the top is the bread and butter of crypto debutants. After hearing of cousin Vinnie’s 100x gains, it is normal to watch a couple of youtube videos, become a crypto expert overnight and ape into crypto despite the NFA and DYOR disclaimers posted everywhere.

Depending on the FOMO level, this may involve buying $BTC at $60k with the certain promise of $150k, or $Safemoon at $0.0000001 with its high chances of hitting one dollar. 

The point is that regardless of the asset, shitcoin or bluechip, being the exit liquidity of whales is yet another crypto-classic.

The beta solution: Centralised DCA

DCA is the process of gradually investing into (and out of) a well-researched asset at regular intervals, so that objective risk management becomes an inherent part of your strategy as FOMO and FUD no longer play a role.

Together with having a diversified portfolio (cough…#Rekt Lunatics), this is the 101 of a successful hands-off investment strategy.

So far, the only reasonable (automated) way of DCAing into crypto is through centralised exchanges like Binance, Coinspot and Coinbase, as far as I know. 

And I say reasonable because I’m yet to meet a single person who has manually DCA’d into crypto with monk-like consistency over long periods of time, highlighting the need for an automated solution.

A good solution, but fundamentally flawed

Platforms like Binance do wonders for crypto adoption and have arguably the best UX, but still suffer from the fundamental issue of trusting a third party with your money, an issue at the core of Satoshi-ism.

Let’s face it, 99.9% of us thought that Celsius was run by financial veterans who knew risk management like the palm of their hand. 

But as it turns out, even pro analysts were wrong, and yet again, trust in humans failed us for the millionth time.

I’m not sure what’s going to happen with my own Celsius deposits, but losing it would be the consequence of relinquishing my crypto to a third party.

So why has no one built a decentralised DCA tool?

Unfortunately, unless you’re a crypto veteran with the time and skillz to build your own on-chain DCA bot, there is no publically available and usable decentralised DCA tool.

Perhaps the problem is that the existing blockchain architecture and mature DEXes out there are still lacking in terms of speed, decentralisation, fees, etc.

For example, Solana keeps having blackouts, ETH costs a fortune, Polygon only has a hybrid AMM-order book, etc, etc, etc.

Building the foundation for decentralised DCA

Following the Terra collapse, the underrated Kuji team went YOLO and decided it was time to host their suite of “Grown-up DeFi” tools on their own, purpose-built Cosmos chain.

The chain was built to be semi-permissioned to ensure quality, have fast block-times to ensure scalability, an on-chain scheduler to optimize transactions and IBC functionality for interoperability.

These essential features are ideal for hosting FIN, one of the first fully decentralised order books in crypto, and a cornerstone for building a decentralised DCAing platform.

I won’t delve in the other revolutionary features that make Kujira unique, but if you want to find out, I encourage anyone to read this fine article.

Calc.fi: The first decentralised DCA tool

In comes Calc.fi, the first purpose-built decentralised DCAing application that uses the FIN order book to implement this much-needed automated strategy.

No longer will existing DeFi users need to rely on centralized exchanges to gradually buy in and out of their preferred positions, but will be able to do so while keeping ownership of their assets.

Founders Fabrizio and Aidan’s intention is to build an MVP by the end of 2022 by utilizing the Kujira community fund. The full details of their proposal can be found on their pitch, and there is active discussion on Kuji’s discord. 

Staying close to Kujira’s ethos of Grown-up DeFi, Calc.fi will not have its own token until it's mature enough for a DAO, and the team plan to make ends meet by sharing usage fees with Kuji stakers. 

The roadmap also includes another feature called DCA+, where depositors will be able to tweak their DCA algorithm utilizing trading indicators like RSI, MAs, etc, without losing the fundamentals of buying at pre-determined intervals.

Many improvements to traditional DCA have been made like RWA and Dynamic DCA to name two, so having this functionality may give the platform greater appeal with more experienced investors.

Kujira is a semi-permissioned chain which means the community must agree to it first, so If you’re a Kuji staker make sure to go and vote for this proposal which will be live in the following hours.

Beyond decentralised DCA

A potential partnership with Kado would permit off-chain users to DCA directly into assets trading on FIN through a single bank deposit.

This means that novice users could gradually get exposure to crypto through an automated, emotionless system where they have full control of their purchased assets, which sounds like mature web3 at its finest.

And with current crypto prices currently being low (my speculative view, NFA!), this could position users favourably for the next bull market, where they would be able to DCA out into real-world dollars if they wish so, just like grown-up investors.

Crypto-wide implications

Bringing the mainstream into crypto in this gradual approach makes DeFi a more sustainable and resilient space as a whole, with dampened volatility as fewer frenzied degens take on bull-market leverage.

The late dramatic collapse of crypto this year is just another excuse for regulators to try to stifle innovation in the space, but it's this kind of sustainable composability that will perhaps spare us from having to deal with more IRL bollocks.

...and if you happen to be an IRL UK business...

Nothing to do with DCA, crypto or a decentralised future, but if you are an IRL business in the UK, just know that you can leverage the free market economy and pay less on your utility bills by comparing your business water and energy suppliers on AquaSwitch. ;)