Blog Post

Potion Review: Protocol based on Kelly Criterion for Risk Management, and Potion NFT Unlock Game to release

Wayne Jones • Feb 21, 2022

Potion Protocol is a web3 dApp that assists in creating automated insurance marketplaces in which buyers and sellers meet and trade at mathematically sustainable prices. How it works is you can buy Potion insurance on the price of, for example, Ethereum, locking a specific price. If the price of Eth falls below that price, the insurance will pay out.



In Potion Protocol, you may also take the opposite side and sell risk insurance (be an LP). As an LP using Potion Protocol, you may use the Kelly Criterion to trade at optimal premium and utilization combinations at all times. Hence, this results in a mathematical expectation of long-term sustainable risk management markets.


Potion Protocol's goal is to make DeFi adoption easier by offering Automated Risk Management on-chain. As a result, the crypto market becomes more secure, with risk products that are safe and sustainable for buyers and sellers.


Moreover, Potion Unlock is a novel paradigm for aggressive decentralization. It establishes a sustainable model for developers of DeFi innovations to focus on software development, as opposed to compliance rabbit holes. Engineering and design of the protocol is separated from deployment and maintenance. With the development of the Potion suite completed, Potion Unlock puts the audited project in the hands of the community.


What Potion Holds?

Potion Analytics

Potion Labs set up a specialized data-science lab to put the Kelly Machine through its paces. Potion Analytics is a set of tools that allow for self-service, no-code back-testing of the Kelly Optimal bonding curves.


The first one is the Kelly Academy that allows users to familiarize with Kelly Criterion in general. It has simple coin toss examples for this purpose

Then, there is the Kelly Optimal Premiums which are the extension of Kello Criterion into the realm of pricing. Kelly vs Black-Sholes is another one. It is a benchmark comparison of Kelly vs BSM .


Next, we have the curve designer is an easy to use custom curve creator with multi-market backtesting. Lastly, we have the Multi-asset pools that allows for the testing of single-curve multi-asset pools.


Potion Unlock

Potion NFT Unlock is a game that encourages the Potion community to work together to release the Potion Protocol into the public domain. With this one-of-a-kind strategy based on “aggressive decentralization” from the start, Potion Labs seeks to avoid the dangers of a traditional project launch, such as a small number of users wielding significant power over a protocol.


Potion Labs has taken the complete Potion protocol coding for risk management of crypto-assets, Potion Analytics and supporting documentation as an encrypted file, to be deposited into IPFS. Following that, they split its password into thousands of pieces and generate private keys which are provided to the Potion NFT minters who can acquire them through a private sale, a public NFT auction, or via airdrops being          performed to OG community members.


Kelly Criterion

The Kelly Criterion is a systematic risk allocation approach utilized by some of the world's most significant risk practitioners. It provides a mathematical framework for making optimal capital allocation decisions in the face of uncertainty.


It is especially significant in this context since it is optimized for survival and growth through repetitive, continuous risk exposure instead of opportunistic single event risk-taking. It is the exact situation the project is aiming for: LPs in an AMM constantly selling risk contracts to achieve steady long-term returns.


The Kelly Machine

The Kelly Machine is a groundbreakingDeFi system. It enables LPs and users to trade collateralized risk contracts, including insurance, puts, calls, and potentially even more complicated derivative products. It accomplishes this using a long-term mathematical expectation of capital growth due to built-in risk management that is automatically applied to all trades.


The premiums for these risk smart contracts are generated analytically from Kelly Criterion optimals. They may then be generalized to apply to any utilization-based pricing scheme.

Key features


●      Optimized for long-term capital preservation and growth throughout all market conditions: programmed to thrive in even the most volatile settings, such as crypto markets.

●      Capital efficiency: Capital may be exposed to numerous risks simultaneously. It allows LPs to achieve better utilization levels and purchasers access a more comprehensive range of goods in deeper markets.

●      Passive experience: LPs do not need to watch their positions continually. Bonding curves alter pricing dynamically to compensate for the risk.

●      Broad product selection: Capital may be used to underwrite a wide range of product configurations, with many distinct combinations of a strike price, term, asset, and so on.


Kelly Machine Vs Black-Scholes

●      Significantly less risky than Black-Scholes. There were discrepancies of up to 100% favour Kelly pricing, particularly for crypto assets.

●      The maximum draw-down is lower than in Black-Scholes. In many situations, Potion Protocol achieved median max drawdowns below 30%.

●      The long-term Alpha expectation is positive as a result of Kelly Optimal implementation.

●      Simple experience for LPs and users, making the Potion protocol accessible to everyone, not just the wealthy.

●      Allows the formation of a market equilibriumcentered on Kelly Optimal pricing.


Potion Lab’s NFT-based Business Model

Potion Labs' business model is a hybrid of many emerging approaches being tested in web3. They want to generate an income by selling Potion NFTs, with pieces of password to decrypt the Protocol, and commemorating the launches of their R&D. As a result, they will produce profits that will support operational expenditures, pay off debts, and keep them working on fascinating DeFi research.


There are six types of Potion NFTs or "rarities”, the more decryption power they have and the less redundancy the better. The first is the Fellowship NFT, the most common NFT (2,600 units auctioned) which provides 6.64% percent decryption power with a redundancy of 100. Advanced NFTs (1,800 units) have a decryption power of 13.13% and a redundancy of 40, so users will have more clout than Fellowship NFT holders.


Legendary NFTs have a decryption power of 17.51% and a redundancy of 25. Potion is only auctioning 750 of these NFTs, but owning them provides users with legendary status over other players.


Original Gangsters (OGs) NFTs (2,850 units) are assigned to their founding members and have a decryption power of 12.77% with a redundancy of 114. Following that, Kelly Knight NFTs (522 units) were made available at Potion's private sale. These NFTs have a decryption power of 9.52 percent and redundancy of 2, implying that Kelly Knights holders will have a significant power.


Lastly, the Wise Wizard NFTs (1,478 units) were also offered during our private sale to key DeFiplayers, and hold a decryption power of 40.43% with a redundancy of 2 as well, also giving their holders significant decryption capability.


The public sale of Potion NFTs is happening imminently. Whitelisting is live, and the Dutch-style auction will be from 28th to 7th March for the Fellowship, Advanced and Legendary Potion NFTs. Book the dates, they’re making history! After the public sale, the Potion NFT Unlock game should start for players to collaborate on-chain to bring enough pieces of password together and decrypt the protocol’s codebase and release it to the public domain.


Potion's Future Goals

Potion Labs' first purpose is to provide a faultless NFT minting experience, while also having fun hosting the Potion Unlock game. It is a novel, revolutionary release method, and the team is eager to give the most excellent possible experience for everyone who contributes to the Potion Unlock open-ended game to potentially decrypt the Potion protocol and release it to the public domain with a sustainable business model for Potion Labs.


On the product front, they are thrilled about expiration-free, pay-as-you-go insurance and automated curve management, two enormous boulders for which they have great ideas and that are a natural next step for this initial release. Long term, Potion Labs dreams about an automatic tail risk hedger for asset portfolios, where one may keep their holdings in a black swan-secure way for a long time.


Final Thoughts

Beyond Potion Labs and its initial specific insurance application, the team feels it is beneficial to think and develop more trustless financial applications like the Potion Protocol. Cooperation among societal actors, like that of the Potion Unlock game to release the protocol’s codebase to the public domain, can yield enormous benefit from this dApp. The long-term effect potential for the development of public goods with a sound business model like that of Potion Labs is substantial.

Disclaimer: This is not trading or investment advice. The above article is for entertainment and education purposes only. None of the content on Crypto Folds is investment advice nor is it a replacement for advice from a certified financial planner. Please do your own research before purchasing or investing into any cryptocurrency.  

AI and Gamification Meets Healthcare

By Press Release • 18 May, 2024
Wellchain , a revolutionary mobile super app that is changing healthcare coordination through artificial intelligence and blockchain technology, designed to simplify care coordination. This software as a service (SaaS) utilizes blockchain technology and offers a number of features such as telemedicine, team communications, remote monitoring, scheduling, alerts, reports, reminders and self-tasking functions.  The app comes in two versions - one for caregivers and one for patients - both of which can be easily integrated on the backend. Among the innovations, I'd note the ability to quantify care by assigning a severity score to a patient and tracking their progress or deterioration with a Change of Condition Index. Wellchain believes that the future lies in decentralization, including a segmented Internet and file storage. The project is backed by one of the industry's leading startup platforms, NFPad.io, and has partnered with Unigrid.io's leading infrastructure engineers. Through the project's features, actionable information can be provided to healthcare providers, helping to improve resource allocation and institutional efficiency. The app is designed for patients, hospitals, and healthcare providers. Wellchain aims to reduce healthcare costs by improving care coordination and incentivizing patient compliance through gamification. Wellchain will save at least 15% of healthcare costs globally (equating to $1.2 trillion annually) and improve patient outcomes by 15%. The value of a Wellchain token is directly related to the production (success) of the company. If a company is successful, 10% of all tokens are burned, resulting in low supply and high demand. Token holders can also vote on important decisions including project funding, token utility expansion, and governance rules. Active membership in the community is rewarded with WELLCHAIN tokens through a giveaway, which is 5% of the tokens. Patients receive attractive incentives (paid by the payer) for adhering to a certain treatment plan, and still incentivizes patient compliance while promoting active community participation. The blockchain uses customized NFTs to easily and efficiently track compliance. NFTs are matched monthly with paper rewards based on the level of compliance. Wellchain has pioneered the use of NFTs as a revolutionary incentive mechanism. On the site, patients can gamify their journey by participating in contests and competitions using NFTs, incentivizing healthy habits and a sense of accomplishment. Patients are rewarded for active participation and adherence to treatment plans. These unique digital assets act as tangible proof of a patient's commitment to their health, which they can exchange for fiat money. By gamifying healthcare with NFT incentives, Wellchain not only motivates patients, but also establishes a direct link between compliance and valuable rewards. The team commits to: continuously improve the functionality and utility of the token, expand the appeal and utility of the token globally, and regularly disclose the progress of funded projects and their overall impact. The WELLCHAIN token is a native token of the Wellchain ecosystem, WELLCHAIN serves a dual purpose in the ecosystem, acting as both a utility token and a management token. This versatility of the WELLCHAIN token contributes to the smooth operation and growth of the Wellchain platform. Oh, and right now you can get a 50% discount before it's too late! This is an exclusive whitelisting bonus. To whitelist, send an email with your government-issued ID to the project. Pre-sale of the WELLCHAIN token has started and runs through the end of May. So with this project you can not only get rewards, but also be healthy to make even more money on the crypto market! With Wellchain you will have iron health and a big bank account! Website: https://www.wellchain.io Twitter: https://x.com/Wellchainhealth?t=jK4MkiazMiioFFg-9NxXHQ&s=09

THOTIANA Launches Memecoin Presale with BONUS Airdrop Opportunity on Solana Network

By Press Release • 18 May, 2024
THOTIANA , the newest meme coin on the Solana network, has announced the launch of its presale. With a vision of transforming everyday struggles into crypto riches, THOTIANA offers investors a unique opportunity.  The first 250 investors will receive a bonus airdrop at the time of launch. Each $SOL invested equals 15,000 $THOT. The Opening of an Exclusive Presale The presale phase of THOTIANA has begun, promising a fair and generous opportunity for early investors. Those who join the presale benefit from potentially high returns and stand a chance to receive bonus airdrops. The team has allocated some of the funds to a strategic marketing campaign to ensure widespread awareness and adoption. Ambitious Plans for the Future THOTIANA's roadmap is ambitious and well-defined. The project begins with the launch of the official website and the establishment of social media channels. This initial phase sets the stage for building a strong community and providing essential information to potential investors. Following this, the presale and marketing phase takes center stage. THOTIANA promises a fair presale, with significant funds dedicated to a well-planned marketing strategy. This approach aims to attract a wide audience and ensure the success of the presale. The project then moves to allocated liquidity provision. Here, the THOTIANA team will add a substantial liquidity pool to a major decentralized exchange. For this purpose, the team set 15% of the token supply aside. To ensure security, liquidity pool tokens will be locked and burned, preventing any removal of liquidity. Additionally, the project will revoke the mint and freeze functions, further securing the project. As THOTIANA progresses, the smart contract will undergo a full audit, ensuring transparency and trust. The project will then launch on a prominent decentralized exchange, providing the best trading environment and early liquidity for investors. This phase marks a significant milestone, offering a secure and accessible platform for trading $THOT. Finally, the airdrop phase will reward all presale participants. Those who qualify for bonus airdrops will also receive additional tokens. This phase reinforces THOTIANA's commitment to its early supporters and ensures broad token distribution. About THOTIANA THOTIANA addresses a major issue in the crypto world: INFLATION. Unlike other cryptos with infinite supply, $THOT has a fixed supply, ensuring upward pressure on its value. Early investors benefit from a unique opportunity to multiply their investment. Additionally, the team will donate 2% of all funds raised to a charity chosen by the THOTIANA community. The idea of promoting social good alongside financial growth is a strong component of this project’s vision. If you missed the massive gains on $BOME & $SLERF earlier this year, now is your time for potentially 100x gains! Embrace the $THOT life & let your SOL take Thotiana to the MOON! Anyone curious to find out more about THOTIANA can refer to the project's website and the social pages below. X (Twitter) | Telegram

Galaxis Introduces AI-Powered Suite to Revolutionize Community Creation for Creators

By Press Release • 17 May, 2024
Galaxis , a leading platform for creators in the Web3 space, notable for its partnerships with high-profile figures such as Mike Tyson, Steve Aoki, and the NBA, has announced the upcoming launch of its new AI-powered Community Creator suite, designed to streamline and enhance the community creation process on their Membership Card platform. This initiative is designed to enhance the community creation process for creators by leveraging the latest AI technologies.  AI-Powered Suite: Revolutionizing Community Creation The suite introduced by Galaxis in the upcoming period revolutionizes the community creation process. This includes the Galaxis Assistant, a tool that aids creators during the ideation and generation process, offering insights and suggestions to enhance projects and make creativity more accessible and efficient. The assistant also supports creators in designing their membership systems, assisting with determining card benefits, quantities, and more for a seamless operational process. Additionally, the suite incorporates an advanced image generation tool powered by GPT-4o and other models, allowing creators to produce high-quality images and art for their membership cards, thus democratizing the creative process. "We are excited to introduce our AI-powered suite, which underscores our commitment to supporting and empowering creators," said Andras, CEO of Galaxis. "By integrating advanced AI tools, we are not only streamlining the community creation process but also providing creators with the capabilities to produce exceptional work. Our goal is to ensure that every creator can thrive in the Web3 space." Please follow the official Galaxis channels for more updates about the AI-powered suite and how it can enhance your creative process. How It Works The AI-powered suite offers a simplistic yet powerful approach to community creation: It all starts with a chat interface where creators describe their envisioned community. The suite generates assets like logos and other design materials based on the input. Automatically, the community page is populated with relevant content. The logic behind the membership cards, such as benefits, is generated and set. Creators can keep interacting with the assistant to change all the variables, ensuring everything aligns with their vision. Once satisfied, creators simply publish their page and membership collection, making it accessible to their community. Galaxis is committed to improving the creator experience, providing customized guidance to meet each creator's unique needs, all integrated into the platform. It ensures every creator can maximize their potential and achieve their goals. The platform stays ahead of industry trends, constantly developing and integrating advanced AI tools, all accessible and controlled through natural language, making it highly accessible. About Galaxis Galaxis is a pioneering platform dedicated to supporting creators in the Web3 space. Known for its innovative tools and partnerships with high-profile figures such as Mike Tyson, Steve Aoki, and the NBA, Galaxis offers a comprehensive suite of resources designed to empower creators and foster community engagement. With a track record of significant success, including over 64,000 ETH traded in secondary markets and over $9 million USD raised through Galaxis Engines, the platform continues to lead the way in the creator movement. Twitter | Discord

Memecoin Madness: Eddie Seal Team Insults Investors and Returns Money from Presale

By Press Release • 17 May, 2024
Two weeks ago, the Eddie Seal memecoin project ($EDSE) began raising funds for development through a presale event. On Wednesday, a controversial post appeared on the project's Twitter, where the team labeled the presale investors as 'morons’.  "You morons. You invest in a presale of a new memecoin and then cry when someone runs off with the money. Get a grip and be careful because 99% of presales are scams. We have returned all the payments to the wallets from which they were sent. Eddie will proceed without a presale!" reads the tweet from Eddie Seal profile . This incident is quite unusual, given market norms. Memecoins are not financial instruments, hence funds raised through presales are not regulated in any way. It is unprecedented for a project team to refund all investments made by individuals. The refund might have been an attempt by the Eddie Seal team to build credibility within the crypto community, especially as Eddie Seal has announced six marketing rounds aimed at reaching a $1 billion marketcap. The campaign will culminate in an Eddie Seal cartoon, in the style of Rick and Morty or Family Guy. The six marketing rounds include sponsoring a Formula 1 team, a Harry Styles (or another top tier star) concert at Wembley with tickets for $1EDSE, a ‘spending money competition’ with 10,000 credit cards linked to one account, and a $3 million donation to MrBeast for spending in one of his videos. It was also announced that the team plans to distribute part of the $EDSE tokens to the community gathered around the project in the form of an AirDrop. Sign-ups are expected to start soon. The price of the $EDSE token in the coming days will reveal how the market has reacted. The token contract address for price tracking is available at eddieseal.org or listed here: 2Zvo6bnwJtyXhsPgbcfajTrEtB7NwrJhK8mMmtEXvHHc X (Twitter) | Telegram | Instagram
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