The history of the brokerage industry can be broken up into
three periods. In the early days (pre-1960’s and 70’s), trades were done on
paper and execution and settlement happened manually via mailmen and
messengers. During this time period, settlement took 5 business days, and the
stock market closed on Wednesday. Market inefficiencies led to high transaction
costs and suboptimal trading activity.
Period two coincides with the creation of electronic
accounting systems and central depositories. During this era paper was
eliminated from securities trading, otherwise known as “dematerialization”.
Another improvement to the industry was multilateral netting- an arrangement
among multiple parties that trades be aggregated rather than settled
individually. This reduced the total number of transactions, lowering
transaction cost and improving settlement speed.
The groundwork for 3.0 was laid in 2008 when an unknown
person(s) named Satoshi Nakamoto released the now infamous Bitcoin white paper.
Since then blockchain technology and cryptocurrencies have become front and
center of the next technological revolution. Blockchain technology provides an
opportunity to create a more efficient brokerage experience. Ahrvo
is a platform for investors and traders to make educated investment
decision using stock and ETF rankings that are updated daily. AhrvoDEEX
enables real-time execution, clearing, and settlement of equity transactions in
a transparent manner without the needs of an intermediary.
What sets AhrvoDeex apart?
Stock Recommendations
and Ratings: Wall Street brokerage analysts are not objective and often
produce inaccurate equity ratings and price targets. A recent study found, from
1981 to 2016, the top 10% of stocks analysts were bullish on (liked) generally
performed worse than the 10% of stocks analyst were bearish on. Stocks analysts
were bearish on (disliked) gained 15% in excess return over the following year
relative to stocks analysts were bullish on. According to Factset, only 5% of
S&P 500 stocks were rated sell in 2017 and 2018. It’s not hard to see why-
a large portion of an analysts compensation is tied to their ability to
develop, nurture, and maintain c-suite relationships.
AhrvoDEEX brokerage
use objective stock scores instead of subjective analysts. AhrvoScores look at over four dozen subfactors that are highly
correlated with price performance, grouping them into four main factors —
Quality, Value, Growth, and Momentum. For the past ten years, the system has
consistently outperformed the stock market (benchmark Russell 3000
w/dividends). The systems performance report was generated by a third-party
firm, EQM Capital LLC. Stock price targets are generated using neural networks
that learn over time, improving the accuracy of results. AhrvoDEEX also uses neural networks to predict future AhrvoScores, allowing investors and
traders to position their portfolios ahead of time.
Order-matching and
Settlement: Transactions conducted by traditional brokerages lack
transparency. It is nearly impossible for a retail investor to view the order
book (bid/ask prices) when trading without using 3rd party systems. As a
result, there is no way to ensure an order is being filled at the best price. Furthermore,
order flows are sold to high-frequency traders who front run (jump) trades,
costing investors and traders money. Lastly, clearinghouses are bottlenecks
that limit settlement speed. On average, it takes two to three days for an
equity transaction to settle.
AhrvoDEEX has
onchain order-matching engine and settlement, providing network participants
with transparency. The network also provides near real-time execution and
settlement of equities. AhrvoDEEX
transaction speed (3-5 seconds) is comparable to centralized exchanges (1-3
seconds) and much faster than Ethereum DEX (~3 minutes) and Bitcoin (~10
minutes). The fact that trades settle in a matter of seconds instead of days
drastically improves post-trade liquidity.
Access for Foreign Investors and Ex-pats
The number
of US brokers that support non-US resident has diminished substantially and
only a select number of US brokers are interested and willing to work with
expatriates. The Foreign Account Tax Compliance (FACTA), which was passed in 2010,
imposes new self-reporting requirements and compliance on financial
institutions. The law requires foreign financial institutions to inform the IRS
of “U.S. Persons” and report the
clients’ accounts to them. However, US financial institutions adopted the
practice. Fidelity, Wells Fargo, and Morgan Stanley are among some of the large
financial institutions closing accounts due to the impact the law has on other
aspects of their complex businesses.
This barrier
to entry limits the number of non-US self-directed investors participating in
US equity markets. In addition, indirect
exposure to US markets is also severely limited. Most U.S. mutual fund
companies prevent their funds from being purchased by non-US residents and
Americans abroad. AhrvoDEEX brokerage
will support foreign investors and ex-pats in compliance with the law in order
to provide to self-directed investors with access to US equities.
The AhrvoDEEX trading ecosystem (brokerage)
will be powered by Ahrvo coin. Participants will be rewarded in Ahrvo coin for
trading (creating liquidity). Other use cases include:
- Platform trading fees (provides %
discount)
- B2B subscription fees (provides %
discount)
- B2C subscription fees (provides %
discount)
- Network custodial fees (provides %
discount)
- Investment performance fees
(provides % discount)
- Margin and collateral payments
- Staking
Keep up with the AhrvoDEEX project!
Download: https://ahrvo.com
Whitelist: https://ahrvo.io
Telegram: https://t.me/Ahrvo
Twitter: https://twitter.com/AhrvoApp
Youtube: https://www.youtube.com/watch?v=xJeQr-IPuRE
Facebook: https://www.facebook.com/AhrvoInvestingApp/
LinkedIn: https://www.linkedin.com/company/ahrvo
