Equilibre.io ~ A Portfolio Balancer for Stellar

MisterTicot

Summary

Equilibre.io is a portfolio balancer for the Stellar Decentralized Exchange.

Description

A portfolio balancer is a software in which you can comfortably manage your funds, fiat or crypto, without having to mess with trustlines, orderbooks & price picking.

Goals

Make the algorithms with which I manage my portfolio since a year available to all, in a friendly interface.
Positively impact the SDEX markets, as the balancer makes gains by providing liquidity where it is needed.
Demonstrate how to build wallet independent application for Stellar.
Develop a lightweight application framework which is XSS-resistant & Content-Security-Policy compatible.

At the time of this writing, all those goals have been attained.

Keypoints

Web application with a wide screen-size & operating system compatibility.
Installable on your computer or your smartphone.
Well-tested algorithms that manage thousands of dollars every day.
Stay safe and never disclose your private key.
Prices in USD or in your national currency.
Account historical performance, including daily historical balances & fiat value.
Multi-anchor support for tethered assets.
Live data always on sync with the blockchain.
Fast interface built on top of an optimized framework.
100% uptime as Equilibre.io runs client-side & only use public APIs.
Translatable interface, with French translation available.
Open source software, as in trustable & auditable.

Usage

Select the assets you want to hold.
Set how muchof those you want (i.e.: 50% USD, 25% BTC, 25% XLM).
Sign a transaction that passes the required trades.
Repeat regularly (every day, week or month).

Equilibre.io doesn’t pass trades automatically: you are the only one in control, as it is meant to be.

The transaction can be signed with either Stellar Authenticator, Stellar Laboratory, Ledger Wallet or the XDR. The interface provides QR codes for phone signing.

Equilibre.io is SEP-0007 compatible, so incoming SEP-0007 wallets such as Keybase, Lobster & Stellar Expert ID will be supported from day one.

Price Picking

The magic happens in the price picking algorithm, which is tailored to fit the specificities of Stellar Decentralized Exchange.

The algorithm takes a number of parameters into account, such as the global asset price, the order size, orderbook spread & existing offers. It will never trade an asset at a discount, but it will definitely detect opportunities to make a premium.

Anchors Aggregation

If you hold a tether such as BTC on two or more anchors, then it will get aggregated & managed as a unique balance. On top of being convenient, it comes with the following features:

Orderbooks merging: orders are passed on the anchor offering the best rates.
Risk management: funds gets evenly spread between anchors.
Easy migration: add/remove anchors on-the-fly.

Portfolio Rebalancing

The point of rebalancing a portfolio is to optimize profits while mitigating risks. While you can use Equilibre.io to buy/sell fixed amounts, portfolio rebalancing is where it really shines.

A portfolio on the Stellar DEX could be something like 50% Lumens, 25% Bitcoin, 25% Ethereum. By regularly bringing back your funds to that initial balance, you can even your performance and turn volatility into a profit.

Worth noting: this is is how crypto index funds such as Crypto20 or Cryptomover are managed.

About This Entry

What Will The Prize Used For?

First thing first: to pay myself. Coding those apps is my main activity and this contest is the perfect opportunity to reward myself for the work.

Then, to finance the ongoing development of Equilibre.io and other Cosmic.Plus software. My notebooks are full of awesome features & I'm nowhere near tired yet.

Finally, I'd like to be able to reward contributors and eventually to welcome a new team member. I think my software could benefit from a talented graphic designer.

Translators Are Welcome

Translating Equilibre.io is merely a story of editing a text file. You'll find details there. I'm also looking for a native English speaker who can help me correct my Frenchy errors.

Feedbacks Are Welcome Too

I'm always happy to hear about your comments & ideas 🙂

Links

Application: https://equilibre.io
Note: You can explore the interface even if you don't have a Stellar account by clicking on "demo" in the footer.

Organization Website: https://cosmic.plus
Update Notifications: https://www.reddit.com/r/cosmic_plus/
Source Code: https://github.com/cosmic-plus/webapp-equilibre-io

MisterTicot

Thank you for giving me the first vote, @dzham.

dzham

MisterTicot

I'll give you more votes later

StellarGuard

Keep up the good work!

MisterTicot

Update 0.9.1:

Theme polishing
Equilibre.io is protocol 11 ready

kirbyrawr

Looking good, good luck!

MisterTicot

Thank you kirbyrawr !

san2ok

Frasindo Team with its projects which dedicated to help people ($FRAS, MyStellar.org, MIBminingpool.com, Warnamu.com, and Coinvit.com, and MiST)

We are supporting and vote for
"Equilibre.io"
In crypto community we hope to support each other, we wish you to thrive.

MisterTicot

Thank you very much to each one supporting my entry! <3

This week I focused on writing an account history widget for Equilibre.io. It reconstructs the daily historic balances of your account & computes its historic performance from there.

The result is displayed in a chart that shows the account value over time in your selected fiat. The first time, the data takes a little time to fetch but then it gets cached & the chart draws fast enough.

That was challenging to implement. However, having a historical view of the portfolio performance is a must-have. Please be curious and take a look at your account history on Equilibre.io. 🙂

(Note: If you already went to Equilibre.io you may have to reload the page to get the latest version of the app.)

Changelog - 0.10.0

Added

Add the portfolio history chart.

Removed

Removed pricing in fiat currencies that were not fully supported: BGN, HRK,
ISK & RON.

Changed

Dramatically improve historical prices caching & performance.
Use Highstock for all charts (saves 224Kb).
Automatically reload the application once an update gets installed.

Fixed

Properly fetch the orderbook for assets with code "XLM" which are not native Lumens.
Fix a case in which the price graph printed a value one day in the future.

MisterTicot

Update 0.10.1 - 2019-06-17

Fixed

Fix an error in fiat historical price refreshing that prevented portfolio
history to get computed in some cases.

Freitag

Can definitely see myself using this in the future. Best of luck 🙂

MisterTicot

Thank you!

Regardless of the result of the contest, I have long-term maintaining plans for this application.

MisterTicot

I'd like to take some time to explain how Equilibre.io benefits to the Stellar DEX.

This is a known fact that one can make profit while improving the market balance. In fact, this is what arbitrage & contrarian trading is about.

When rebalancing portfolios, Equilibre.io uses limit orders. Meaning: it adds new offers into the orderbooks, rather than matching existing ones (aka market order).

The first reason to do that is that most SDEX pairs have high spreads (ratio between first selling offer price & first buying offer price). Spread is like a fee for taking liquidity out of the market by matching offers. So: if you have a 1% spread on a pair it means you'll pay a 1% fee for using a market order instead of a limit order.

That's why I found more profitable to creates new offers, even while some of them don't get taken. A side-effect of this is, Equilibre.io users are constantly bringing liquidity to the market, reducing spread & solidifying pairs they trust into.

The amounts involved are humble, but because volumes are low it can go a long way in improving SDEX environment. In quiet market conditions, you can expect about 1% of a portfolio total value to be available as liquidity in the market. In rally/crash conditions - when we need liquidity the most - it can go over 5%.

By playing the role of liquidity providers, Equilibre.io users receives the spread fee from liquidity consumers. This can be thought of as a reward for improving the market. In current conditions, my estimation is that a portfolio can make over 3%/year this way.

Another fact to account for is that, when using multiple anchors for a same asset, Equilibre.io will trade the most interesting orderbook. Here again, user makes a net profit for bringing balance to the market. It's hard to come with an estimation of how much, though.

To summarize, Equilibre.io implements what I call peer-arbitrage. This could be the foundation of a distributed economy in which we rely on a peer-to-peer solution to stabilize market, rather than on those "trusted" third parties who occasionally involve in market manipulation & keep all the profit for themselves.

Scopuly

Hey.
Really cool idea. It is surprising that such powerful trading and investment tools are beginning to emerge on Stellar. We at Scopuly see a large field for applying Equilibre tools. In your project, it amazes how strong the thought becomes when it goes towards Stellar!
Good luck in your implementation!

MisterTicot

Equilibre.io: In-Depth Analysis After One Year of Rebalancing

Equilibre.io 0.10.0 came with a way to compute the full historical value of any Stellar account, in fiats. After entering using the account public key, it is under “Portfolio” => “History”. In this article, I’ll use this data to analyze the performance of an account that I rebalanced using Equilibre.io’s algorithms since over a year.

MisterTicot

Update: Equilibre.io 0.10.2

Changed

Update cosmic-lib to 1.5.1. (Security fix)

Fixed

Fix an error in fiat historical price refreshing that prevented portfolio history to get computed in some cases.

MisterTicot

July Updates

A lot happened since a month, as Equilibre.io made its way toward the stable release. I hired a designer & we improved the interface together. A lot of bug fixes & fine-tuning happens.

Thank you for your support & suggestions, that helped me make my way toward winning that SCF prize. I could put a fund aside for long-term maintenance, and pay myself (scarcely, to be honest).

In any case, SCF was a good opportunity to meet devs, learn about their work, raise awareness around mine and explore the possibilities & the limits of my economic model.

About the future: I have a few options to develop Equilibre.io beyond its current set of features. Proofs-of-concept are there, so a v2 is definitely possible providing I find a way to make its development sustainable.

Once again, thank you to everyone who voted for Equilibre.io & took the time to dig into my other soft. More is coming so please stay tuned 🙂

1.0.3 - 2019-07-23

Fixed

Workaround an issue introduced in stellar-sdk 2.0.1 that broke portfolio
history retrieval.

1.0.2 - 2019-07-22

Changed

Improve mobile display.
Throw an error when a too low XLM allocation would cause rebalancing to take
more than 20 steps.
Remove thewwallet.com WSD from anchors choice because it has not enough volume
anymore.

Fixed

Ensure that outdated offers are replaced before new one are passed. This fixes
cases in which outdated offers prevented to pass new ones due to liability
threshold.
Fix a case in which clicking "Cancel" in the target setup dialog would not
reset target setting to the previous state.
Fix several miscalculations related to balancing assets with multiple anchors
& liquidation. In some cases, those mistakes were preventing trades to be
passed, or were causing trades to be passed with lower amount than expected.
(Thanks m4dpr0ph3ss0r)

1.0.1 - 2019-07-11

Fixed

Fix a bug that sometime caused rebalancing transactions to be invalid. (Thanks
m4dpr0ph3ss0r)

1.0.0 - 2019-07-06

Added

Deal with cases where there's not enough XLM to rebalance the portfolio in one
step.
Lock a minimum XLM balance to pay for network reserve & offers.

Changed

Theme Highstock according to new Equilibre.io colors.
Target configuration form appears in a modal box.
Add a title to each card.
Don't raise an error anymore when rebalancing target is over/under portfolio
total value by less than 1‰.

Fixed

Fixed a bug that could lock the app on very low width display.
Reduce font size on wider screens. (Thanks @Pselden & Damian)
Fix a case in which allocation check limits were bypassed.

0.11.2 - 2019-06-28

Fixed

Adjust text size on small screen devices.
Fix Source Sans Pro font path.

0.11.1 - 2019-06-28

Changed

Complete interface re-design. (Thanks Alris Can)
Make demo easier to spot.

0.11.0 - 2019-06-25

Added

Legal disclaimer.

Changed

Rewrite 'Welcome' page.
Easier access to the demo account & the related article.
Tiny theme tweaks.

MisterTicot

Funding Disclosure

The 2019-07-16, Equilibre.io received 273,556 XLM from SCF #1 for the 7th rank. This was $21,290 at transfer time, expected $14,900 after taxes.

Equilibre.io development took about 8 months of work, mostly concentrated between Oct 2018 and Jun 2019. The costly areas were:

Developing a dedicated application framework. Equilibre.io is made of several complex mathematic components that have to dynamically update each other. A dedicated framework has been developed for this purpose. Another motivation for developing a new framework rather than using an existing one was to lay down the foundations of a framework better adapted to crypto environments (lightweight, client-side focused, XSS-resistant).
Extended researches about financial concepts and their applications. (See for example the BetterDEX proposal)
Adapting the concept of portfolio rebalancing to the Stellar DEX. While the concept of rebalancing is mathematically simple, its complexity quickly explodes at implementation time. When it comes to the SDEX, one has to figure out how to build an algorithm that remains safe yet efficient on low-volume/high-spread order books. This non-trivial problem has been solved after one year of experimenting with a broad range of solutions with low-value portfolios.
Orderbook merging. Equilibre.io is the only SDEX interface that can merge similar anchors together, such as USD or BTC anchors. The trading algorithm takes offers from the more interesting order book - while maintaining a balanced fund (risk) spreading. This tech required a lot of attention & fine-tuning before it became production-ready.

Once the funding was received from the SCF, it appeared that the project was in the red and had no further opportunity to finance itself. After polishing every detail, I decided to switch to long-term maintaining mode.

The infrastructure behind Equilibre.io is low-cost (under $100/year), and maintaining it up-to-date with the Stellar network proved to be an easy task so
far.

Minimal Commitment

Equilibre.io will remain up-to-date and functional as long as this can be achieved with low-commitment attention. Considering SDF non-breaking updates
politic, Equilibre.io is likely to stay around for years.

This is a minimal commitment: Equilibre.io is still susceptible to receive updates & new features from time to time. For instance, Trezor support has been
added recently added as I developed a dedicated
library.

About

This disclosure is meant to inform the community about how Cosmic.plus is using the funds it receives from the SDF.