Investing in anything, let alone Crypto, can be a daunting task.
The issue?
Lack of understanding and lack of time. It is precisely due to these reasons that the investment profession has given rise to intermediaries like Banks, Insurance companies, mutual funds, and the like to do all the heavy lifting for you.
Crypto is no different. Unfortunately, there exists a lack of education on the subject.
Well, here is where I am going to help you. Having already written about Zignaly in an earlier article, I will now focus on a review of Mudrex, an automated strategy provider.
Ready? Let’s go.
1. What is Mudrex?
Mudrex is an automated investment strategy provider for crypto.
In layman’s terms, they offer curated investment products that you can choose from depending on your risk profile.
2. What Products Does Mudrex Offer?
2.a. Mudrex Coinsets
Coin sets are baskets of cryptocurrencies chosen due to their identification with a particular theme. Some of the coinsets available at the moment are:
- Metaverse tokens
- NFT tokens
- Smart contract platforms (layers 1s);
- Top Crypto blue chips
These coinsets allow you to invest in ideas. Say you have been reading about metaverse coins being the next big thing but don’t know which one to invest in. Coinsets remove that obstacle.
2.b. Mudrex Mints
This is a set of three products that follow the mutual fund formula:
- Minimum investment threshold
- Entry / Exit at any time
- A Risk/ Reward tradeoff between High (Equity fund-like), moderate (balanced fund-like), and Low (Income fund-like) products.
Again, fund management is the headache of the Mudrex trader while you, the investor, generate an income passively.
2.c. Mudrex Algos
These are technical analysis-based trading bots offered on the Mudrex platform by their traders.
A variety of strategies are available to invest through in an automated manner so that you don’t need to learn TA or find the time to trade actively.
2.d. Interest Account
This is similar to a bank savings account except that it offers a 14% return per annum and is defined as low risk.
2.e. Exchanges Covered
These products are available for coins listed on Coinbase Pro, Binance, Bybit, Deribit, OKEX, and BitMex.
Mudrex holds no funds and only provides the investment strategy that may be implemented through API key connectivity on your funds at the aforesaid exchanges.
3. What About Mudrex By The Numbers?
3.1. Business Metrics
Mudrex self-discloses 700,000 investors using its platform but a paltry $20mn of assets under management. This is in contrast to Zignaly, which has 450,000 investors & $120mn in assets under management.
With $3bn of trading volume since inception, they are close to Zignaly at $4bn.
Assuming the data to be accurate, it seems they have a higher percentage of inactive accounts, which could account for the low assets under management.
The project did announce that it had become the largest index asset manager in the world for crypto in Q1 2022 but it seems that the numbers don’t align with that statement.
3.2. Community
An analysis of their social media following also doesn’t explain the high account numbers.
They have 12,500 approx followers on Twitter and only 2,800 on discord. Zignaly, for purposes of comparison, has 86,900 & 13,000 followers on Twitter and Discord respectively.
4. Is Mudrex Legitimate?
The project carries various marks of acceptance. These are:
- A doxxed team that ensures that there is no anonymity behind the project;
- The project requires KYC for investors;
- World-renowned venture capital firm Y Combinator is an investor in the project, along with a few other big names;
- It has been picked up by international publications like Forbes, Business Insider & Bitcoin.com;
5. Is Mudrex Safe?
As part of our research, I didn’t find anything negative with respect to funds being stolen or misappropriated. However, like all investment apps, the project remains susceptible to market-related investment risks:
- Except for the Algos, all other products are provided at a proprietary level and are managed by professional traders. However, they are prone to the same biases as individuals, but one would expect them to be susceptible to a lesser degree and practice risk management;
- The Algos are community-driven bots and the platform provides a solid strategy builder & backtesting engine which helps refine & perfect them before they come to the market. Again, it is expected that each one of these automated strategies has risk management protocols built into them;
- The investments remain susceptible to translation risk when compared with Fiat. You may earn 14% interest on your $ stablecoin, for example, but your country’s currency strengthening against the $ will impact your overall return.
Furthermore, it is understood that these are non-custodial solutions, meaning your funds are held on an exchange account (similar to Zignaly) & not with the platform or the algo creator.
You link your exchange account with your Mudrex wallet through API keys. State-of-the-art encryption software ensures that your funds and your identity remain secure.
6. How To Invest in Mudrex?
Mudrex has an extremely simple onboarding process:
- Create or login into your Mudrex account (you could simply use your Google ID to cut through the process of choosing a password);
- Connect the desired exchange with API keys;
- Choose the bot you want to invest in and select the amount;
- Pay the platform fee, and you are good to go.
7. What is the Fee Structure at Mudrex?
The protocol charges a small fee (sometimes as low as $5 per month, as per the plan chosen.
They have a Pay As You Invest model whereby, only when your funds are being utilized by a chosen trading algorithm, do you get charged a fee. There is no charge for idle funds.
8. How Does Mudrex Make Money?
No information is available, but it is understood that Mudrex makes money through two channels:
- The management fee it charges its client accounts. As explained earlier, this varies as per the plan/bot chosen and is minimal;
- Client-directed brokerage as a rebate from the exchanges. In layman’s terms, this means they get cash back for directing transactions to a particular exchange;
- Charging a fee to traders who want to build their own algorithmic trading strategies (although there is a free version as well)
9. What Are Some of the Upcoming Developments at Mudrex?
The protocol has launched a major overhaul of its interface, dubbed “Project Phoenix”. Just like the mythical creature who blows up into ashes and is born again, Mudrex is changing its complete way of operation.
In a nutshell, it entails:
- Reserving & upgrading the existing web-based infrastructure for traders only. The protocol expects its strategy builder & backtesting engine will continue to attract traders to its algorithm-driven product thus creating consumer choice.
- Shifting of the retail investors to a new app-based infrastructure. The idea is to promote ease of investment by eliminating the need for a computer (as more people have smartphones than personal computers)
More information on Project Phoenix is available here.
10. Verdict
Given just how difficult it can be to develop the expertise & find the time to manage your crypto portfolio yourself, Mudrex ticks all the boxes of being a reliable solution for the retail investor.
The onboarding process is quite simple, and the overall fee structure is quite attractive. Lastly, the strategy building and backtesting engine is a unique proposition.
However, there are a few negatives:
- The website, understand it’s going through an upgrade, doesn’t work with various points where a link should have been missing any links;
- There is no help section & the blogs are written in a haphazard manner instead of providing a clear guide. For example, Mudrex is purported to have an insurance product that pays if certain strategies don’t pay a certain guaranteed return. I could not find any information on this. Again, this maybe due to the website going under maintenance;
- Self-disclosure of data doesn’t tie in with observed community metrics. The data is stale or maybe there are inactive accounts for which we have no information in terms of whether the data suffers from survivorship bias. The average account size could also be small in relation to the competition, but then again we have no information on this;
- The focus seems to be on quantity over quality of traders, with the strategy builder & backtesting engine being dedicated to the whole web interface. The flip side of this argument is that poor traders (and their strategies) will ultimately be found out themselves, given the transparency of the investment performance metrics.
All in all, this is a solid product that solves a vital issue in the world of democratizing access to investment and key high-end investment strategies, particularly for Crypto.