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Financial Architects: The next-generation investment

What makes a perfect investment?

One ‘perfect investment’ doesn’t exist. It’s always different for different people. 

Some prefer a long term high yielding government bond. Others like to risk it all buying the next hotshot tech company’s stock fresh off the IPO. Some even look to buy a little known internet currency doing the rounds on cypherpunk circles. The point is people are different, and so are their investments.

While there is no ‘perfect investment’ there is ‘personal investment.’ Investment that makes sense to you, because it satisfies your risk-appetite, current needs, and future goals. However, rarely can you actually make your ‘personal investment’ reality and oftentimes, you just have to buy into buckets of investments offered. 

But this is changing.

As the worlds of finance and technology come together, ‘personal investment’ is being created by people we like to call ‘Financial Architects.’ Financial architects allow investors to curate their investment based on their specific characteristics. Wait, isn’t this the same as traditional wealth managers? You’re not wrong there! In their execution, financial architects do a similar task to your traditional wealth manager or financial advisor, but they actually do so much more.

With the growth of digital technology, these ‘financial architects’ are creating the potential to make ‘personal investment’ possible. Using the tools of digital assets and placing protocols on top of each other 

Financial architects aren’t simply finance professionals. They include technology professionals building networks, applications, blockchains to help store, transact, and invest assets easily. Individuals can use these tools to invest in a range of assets, from equity to bonds to cryptocurrencies easily, without interacting with any intermediary.

What this is creating is a system of continuous ‘personal investment’. What’s the continuity, you ask? Well, it’s the function of ‘rebalancing,’ where parts of the investment are continuously rebalanced to make sure the goal is unaltered, even if the value changes. We’ll discuss this ‘rebalancing’ concept in detail later!

This system allows each part of the investment portfolio to be created consciously and for a specific need. No asset is bought or sold because it’s part of a bucket which it cannot be removed from. Each transaction is made directly through a computerized program reducing any fees and friction in the traditional system. So, how does it work?

Before we get into how financial architects work and what they mean to the finance and technology world, let’s look at how we got here! 

If you already know the different forms of investment, you can skip down to the financial architects section!

A brief history of investing

In order to learn about ‘financial architects’ the creators of the ‘personal investment’ we thought it would be wise to learn a bit about simpler forms of investments. Building an investment portfolio is like building anything else, you can do it, or you can pay an expert to. However, there are variations to what the expert will do, and how much you pay them of course!


Stockbroking is the act of buying and selling of stocks by stockbrokers on behalf of investors. For every trade (either buy or sell) you execute, brokers get a commission. So, no matter if you make money buying a stock at a lower price and selling it at a higher price, or vice versa, they make what’s called a commission. The point is, brokerages need you to trade to get a commission. So, how do they get you to trade? Well, they give you an incentive.

Brokerages provide advisory services and come out with research reports about a stock’s projected price. They give ratings, provide buy or sell signals, and even give an estimated price upside or downside of the stock. In short, they tell you about the stock’s price from an industry or market point of view. Stockbrokers at the time were a valuable intermediary, they allowed interested investors to invest in the stocks they like. However, stockbrokers operated in an isolated environment, buying and selling stocks on behalf of clients. They weren’t able to buy and sell stocks from the investor’s overall portfolio.

Financial architects are hence a modern-day development of stockbrokers, allowing the portfolio to be built based on an overall goal, not merely buying and selling.

To compare this with financial architects, stockbrokers do not tell you about the stock from the perspective of your overall portfolio. 

Let’s try to understand this with an example. Adam has $1,000 and would like to grow it over the next few years. He goes to a stockbroker to help him invest it. The broker, being a broker, and not a financial advisor or an investment manager, advises Adam to invest it in companies which have the potential to grow over time.

What the stockbroker is doing is providing an isolated, albeit important, function of buying and selling stocks with some understanding of the market and the companies. However, at a time when stockbrokers were the main financial intermediaries between the investor and the market, their function was not expanded into financial planning, it was limited to intermediation and simple advice.

The stockbroker was unable to take into consideration what kind of portfolio Adam would like to build? What his immediate expenses are? Does he require regular income? Is he saving for a big expense? These weren’t considered because the diversity of investors were limited. But now, with a plethora of investment products, assets, strategies, and investors, the stockbrokers have evolved into financial architects.

Mutual Funds:

Mutual funds are like groups of assets stockpiled together. The mutual fund managers analyze a bunch of assets, determine that they have similar characteristics, and group them into a “fund.” Investors can look at this fund, and if it matches their needs, they can invest in them. The assets within these funds usually have similar characteristics along the lines of type, risk profile, objective, and size of the company. Broadly, they can be grouped into debt funds (primarily consisting of bonds), equity funds (primarily consisting of equities), and hybrids (both debt and equity). More specifically, mutual funds can differ based on growth versus income, long-term versus short term, open-ended versus closed, direct orders versus repeat orders, and more.

For an investor, the only question is picking the fund, the fund manager does the rest. Again, taking the example of Adam and his $1,000, if he puts it into a mutual fund, there is a lot more activity than the previous stockbroker example. The fund manager will put Adam’s $1,000 into the mutual fund based on its Net Asset Value (NAV). Put simply, the NAV is the per-share market value of the fund. It is calculated and reassessed at the end of each trading day.

The mutual fund investment of $1,000 will be represented in a specific amount of “units” purchased, which is based on the fund’s net asset value. Since mutual funds have to be built by managers, based on certain criteria, there are expenses attached to them. Two main expenses to look out for mutual funds are the expense ratio and the load.

Here, from the standpoint of the concept of financial architects, the fund manager is doing more than a broker. The manager is creating a fund based on the potential characteristics of investors. But investors still have to invest strictly based on the funds, with no adjustments for their “personal investment.” 

Index Funds:

Index funds are an evolution of mutual funds, or rather the market’s improvement on mutual funds. Every investment market has a list of stocks that are the market leaders. They are usually categorized by region, industry, or capitalization. Capitalization simply means the size of the company, it is calculated by multiplying the number of shares in the market with the current trading price of each share.

Market indexes simply list the market leaders. A change in these indexes is fairly representative of the industry. Index funds allow investors to simply invest in the market leaders based on the index. Typical indexes are the Standard & Poor 500, the Dow Jones Industrial Average, the Russell 2000, the Euro Stoxx 50, the Nasdaq-100, etc. You might’ve heard the first two abbreviated as “S&P500” and the “Dow”!

The key difference between index funds and mutual funds is in simplicity and cost. Since index funds track an index that is readily available, the management is simple. Index funds simply represent the stocks in the index, and an index fund simply represents the stocks in the index based on a weighting. Because of the simplicity of management, index funds have a lower cost associated with them. 

Here, the simplicity is not exactly reduced, it’s outsourced to the market. The market decides the market leaders, and those stocks enter the funds. Again, the ‘personal investment’ from the standpoint of the individual and the ‘financial architects’ concept is missing.

Exchange-Traded Funds [ETFs]:

A combination of a mutual fund and an index are exchange-traded funds [ETFs]. From mutual funds, ETFs take the characteristic of pooling similar assets. From index funds, ETFs take the characteristic of representative assets. ETFs are baskets of assets that have a specific value, based on the assets and their respective weights. They trade at a particular price and they can be traded on the exchange as and when required, hence the name. ETFs comprise a set of assets of the same type like stocks, bonds, commodities, cryptocurrencies, or a hybrid of them. 

The key point to remember is an ETF is like a stock, it can be traded on the exchange as frequently as a stock does. It’s like a fund, in that it represents a bunch of assets, not just one.

ETFs have an added level of simplicity and flexibility to them. They are more representative and can be traded easily, combining the best aspects of trading stocks individually and buying funds. However, from the standpoint of financial architects, there is still a bit of rigidity. The investor has to depend on an ETF fund manager to make a list of assets for them to trade. While its broad type in terms of asset type, industry type, and duration type is the same, how it fits the overall portfolio and needs of the individual is absent.

In the picture above you’ll notice a theme. With each type, the individual has more information about the investment they are making. They have more of a reason to make the investment. Each form of investment brings with it a clearer picture of how the investment fits their ‘personal investment,’ their overall portfolio, needs, and goals. However, there’s another obvious common theme. The theme of human intermediaries.

Each type, whether it’s stock broking, mutual funds, index funds, or ETFs are managed by a human entity. If you’ve heard anything about the crypto and decentralized finance space it’s the emphasis on automation and efficiency through computer programs. The same goes for investments. 

So, how do we take the act of traditional investment management, as seen in the above examples, and give it an automated touch in the decentralized finance space? Well, let’s first start with something similar to ease you into the concept of financial architects. This form of investment, while not the DeFi space, is a useful precursor to financial architects.


Robo-advisors are simple computer programs providing financial advice. Just like a financial advisor provides advice on what stocks, bonds, or funds to invest in, robo-advisors do the same. However, they aren’t operated by a human intermediary. They are computer programs that recommend stocks, bonds, or funds to invest in. They provide this list after the individual investor has filled out a survey laying out their investment plan, immediate needs, and future goals. In short, this is an investment plan, based on the investor’s ‘personal investment.’ Robo advisors don’t just throw up a list of assets to invest in. Remember the ‘rebalancing’ concept of financial advisors? Robo-advisors do this as well.

Assets aren’t stable in price, and they have a variety of risks attached to them. That’s why as times change, so does your portfolio. Robo-advisors continuously re-balance an individual’s portfolio to maintain their level of risk, income, and safety. Individuals do not have to make multiple transactions to bring back these levels. Instead, they can just fix this with the robo-advisors, and as the assets’ price changes, they are bought and sold and the level is kept stable.

How do Robo-advisors work?

Let’s look at this in the form of an example. Adam invests $10,000 with the help of a robo-advisor. In order to keep things simple Adam, splits his initial investment down the middle, 50% in stocks, and 50% in bonds. So, $5,000 in stocks which are volatile, and $5,000 in bonds which are not that volatile. From the stocks, he’s looking mainly for growth of the investment over time. However, from the bonds, he’s mainly looking at safety and regular interest payout over time. His stocks’ price will continuously fluctuate, but his bond value will be roughly the same, as they are more risk-free. In time, due to a healthy market, the stock’s price has increased from $5,000 to $6,000.

Now, the ratio has changed to 55% stocks at $6,000 and 45% in bonds at the same $5,000. His total investment is up to $11,000 from $10,000. Here, the robo advisors will simply sell a part of his stocks at a higher price, and with the amount received will buy bonds rebalancing the portfolio. Ta-da! Simple right?

That’s how robo-advisors rebalance portfolios automatically instead of relying on human intermediaries. This automated investment concept can go beyond rebalancing. Let’s look at how it can fit into goal-setting?

Can robo-advisors customize?

Let’s keep the basics of the previous example, but add a caveat here. Adam also tells the robo-advisor he wants to earn $5,000 for a family vacation. How would the robo-advisor plan work this out? Well, let’s see. The same division of funds at 50% in stocks and 50% in bonds applies. However, every time there is an appreciation in price, instead of rebalancing it into the other asset, it is saved up for the vacation funds. So, if the market is healthy and Adam’s $5,000 in stocks rise in value to $6,000, the additional $1,000 is put into the vacation fund.

Here, the robo-advisor will simply sell a part of the stocks at a higher price and with the cash received a deposit into the vacation fund. Adam can choose to keep the vacation fund in cash, bonds or any other asset which is of low risk. Additionally, part of the income he receives from his bond interest can also regularly be sent into the vacation fund. Say he receives a 10% interest every year.

This would mean $500 i.e. 10% of $5,000 would be received as part of bond interest. He could put 50% of this interest received into his vacation fund. This would mean $250 i.e. 50% of $500 would be deposited into his vacation fund. Here, both stocks and bonds are contributing to his vacation fund while maintaining a 1:1 or 50% weightage each in Adam’s overall portfolio. 

Variations of the above example can be used for different individuals. If you’d like a different set of assets, the portfolio can be changed accordingly. Or, if you have a different goal, with a different amount and a different timeline, the portfolio can be changed accordingly, or if the market moves a different way, the portfolio can be changed accordingly. In short, the change to the portfolio is dependent on you, and your goals, needs, and wants. Robo-advisors simply do this for you for a fee. And their fee is cheaper than most fund managers.

Brokers to robo-advisors

The traditional finance world has come a long way from individual stockbrokers to computer programs providing financial advice. However, this is a natural progression. As both finance and technology have developed over the years, there has been a wave for more personal capital management. Not only have the assets evolved from government bonds to cryptocurrencies, but so have the diversity of portfolios. No more do you see portfolios that are only stocks or only bonds. People want the safety of traditional financial instruments and the adventure of new-age investment products. Products like cryptocurrencies, and DeFi tokens.

Financial architects are building a system to allow this ‘personal capital management’ not just with traditional financial assets like robo-advisors, but with so much more. Let’s find out how, but first, let’s understand a little bit about cryptocurrency investment!

A brief history of cryptocurrency investing

Investing in cryptocurrencies has come a long way in the past decade. From being labeled ‘magic internet money’ to the ‘native currency of the internet’ that’s a big jump! But the complicated financial products we have in the crypto and decentralized finance world started off the same way as the stock market did, with simple everyday products. Let’s run through a few of them now.


Don’t worry, I didn’t misspell ‘holding.’ Hodling is a term in the cryptocurrency space popularly abbreviated as hold on for dear life. This phrase became popular during the massive volatility cycles of Bitcoin and other top cryptocurrencies back in the mid-2010s. In the realm of cryptocurrency investing, hodling was arguably the pioneer. Put simply, hodling meant, hold on to your cryptocurrencies till they reach a high price. It was a simple, no-nonsense sort of investing where investors would simply buy and hold Bitcoin and wait till the price rose. Again, as simple investment approaches go, this was the simplest. No planning of how this would fit into your portfolio, no calculating future goals, and current needs, just hoping for a rise in the distant future.


Some people can get tired of waiting, and when hodlers get itchy, they sell, that is trading. In the financial world, investing and trading differ in terms of time periods. Short-term buying and selling or assets for a profit is called trading. Traders benefit from volatile markets, and if crypto-markets are anything, they are volatile! Because of the rapid price changes in cryptocurrencies, trading became quite popular in the cryptocurrency market during 2016-2017. At the end of 2017 when Bitcoin went as high as $19,000, taking almost every coin in the market with it, traders were over the moon. However, a few months later, the entire market crashed and the so-called altcoins (alternatives to Bitcoin) came crashing with it. The investment funds built on top of these altcoins lost millions during 2018. 

Now, obviously, there are a lot more nuances with trading and hodling than we’ve listed here. For instance, products like derivatives allow trading with an added hedge, funds like Grayscale Bitcoin Trust and Ethereum Trust allow exposure to cryptocurrencies without actually holding them, and more. The common theme is, these investment products are static. They restrict individuals to the asset and nothing more. Sure, they allow stretched timelines and storage but they limit the use of cryptocurrencies to a basic investment. You can’t simultaneously hedge cryptocurrencies while earning interest on them. You can’t participate in a liquidity pool while pledging your crypto as collateral. These flexible financial instruments are being built in the decentralized finance world. Let’s see how crypto-investment is developing beyond just hodling and trading.

Investing beyond trading

We’ve previously seen simple and static forms of investment. The above investment examples even in the cryptocurrency world involve just moving crypto back and forth for price gains. With the only difference being the duration. Financial architects are creating systems where investment goes beyond that. Through the use of code and digital systems, you can have multiple investment options for single cryptocurrencies. Each option can satisfy a different investment need, all within one system.

Let’s have a look at a few ways you can use the financial architect system depending on your diverse needs.


Let’s say you have two broad investment goals – grow your wealth and earn regular income. Simple right? These are easy to understand everyday goals which investors in an asset class have. In the decentralized finance world these two investment goals can be expressed as – going long on an asset and participating in a liquidity pool. Going long simply means owning an asset hoping that its price will increase in the future, which implies growth. A liquidity pool is a pool of similar cryptocurrencies which can be used for various financial functions like borrowing or pledging assets. Participants can receive interest by pooling their idle cryptocurrencies, earning a regular income.

In the financial architect world, you can divide your investment based on your preferences between growth and income. Let’s say you have 10 ETH, you can divide them into holding on to a 5 ETH as growth prospects, hoping their price will increase. The other 5 ETH can be locked in a liquidity pool earning regular interest. You can even set a limit to the amount of interest you receive and once high enough, use it to buy a particular asset to go long on once again. This way you can track both growth and income goals without any hindrance.


Financial architects can also build investing systems for multiple cryptocurrencies. You don’t have to be pigeonholed into holding just one currency, or worse holding two in two separate accounts, wallets, or exchange. You can rather hold them as a single set. Let’s say you have an eye for only two coins in the market – Bitcoin, and Ethereum. Instead of purchasing them separately via an exchange, why not purchase a single set of tokens which each have a Bitcoin to Ethereum split 1:1. These are called token-sets, and they are exactly what they mean, a set of tokens. These tokens represent the cryptos within them in a particular ratio. Investors can simply buy them at a specific price which is divided between the underlying assets in the ratio.

What this means is, let’s say you have a token which is split down the middle between BTC and ETH, in a 1:1 ratio. If you buy the token for $50, the same way you’d buy it off an exchange and get 0.005 BTC and 0.14 ETH (or whatever the rate is), here you’d buy $50 of Bitcoin and Ethereum in one go. You’d own the token set for $50, but within it you’d have bought $25 of BTC and $25 of ETH. This will allow you to easily make the decision to buy any combination of two or more cryptocurrencies in one go, rather than make several transactions, across different exchanges and then funnel it into one wallet. Isn’t this simpler?


These financial architect-based systems aren’t only geared towards buying either. In fact, it can be multi-layered with buying and selling signals depending on certain trading strategies. Cryptocurrencies can be immediately bought and sold when a certain technical trading strategy is triggered. The investor simply sets in the trigger, puts in the amount they wish to buy. The system does it for them continuously whenever the specified strategy is triggered.

Let’s look at an example. Say you’re a trader who trades according to a coin’s moving average. The moving average is the average price of an asset across a set number of days. Say, the moving average you use is the 100-day moving average. Your strategy is simple, if the trading price of the asset crosses over the 100-day moving average, it’s time to buy. If the trading price of the asset crosses below the 100-day moving average, it’s time to sell. Well, you simply put this into the system, put in some fiat currency or a stablecoin to buy your crypto and let the system work for you. Whenever the price crosses above or below the 100-day moving average, your order is executed and you either buy or sell your cryptocurrencies. Pretty neat, right?


Synthetic assets are assets that represent the values of other assets. That seems confusing? Well, let me simplify. An asset is denoted by its price and its price change, right? What if we can take that price and that price change and put it in a contract? Or better yet in a coin? What if that coin could be bought and sold? Such that its holder has exposure to the asset without actually owning it. That’s what a synthetic asset is. You can buy a synthetic asset which represents the value of the S&P 500, or gold, or oil, or a basket of fiat currencies. This way you’ll have direct exposure to these assets without actually owning them.

An important point to note here is how these synthetic assets track the price. These assets use oracles which are systems tracking data, in this case, price data. These oracles relay the price information back and forth so that the synthetic asset tracks the price of the actual asset.

In the financial architect world, synthetic assets representing a group of real-world assets can be easily bought and sold. This can be done without any real-world exchange, depository, bank, brokerage, or other financial intermediary involved.


You can even buy assets with the sole intention to hedge your other assets. Hedging, in the financial world, means to offset the risk of one asset with another. However, in the financial architect world, hedging goes beyond your portfolio, and well into your real life. Through products that allow an ‘inverse’ bet, you can bet against an asset. And through the use of synthetics, you can bet not just against cryptocurrencies, but against real-world assets. Yes, that’s right, you can actually gain money in the DeFi world betting against a real world asset, like gold or oil. But why would you? Well, maybe one of these assets are tied so tightly to your daily lives, that if everything goes south, you’d want an asset that goes up. Let’s have a look.

Say you live in a city which is very dependent on oil. If the oil markets are booming, everything is fine, if the oil market tanks, local prices go through the roof. What do you do here? Do you just hope that the oil markets stay stable? I wouldn’t bet on it. In the financial architect world, you can buy an inverse oil contract, something like an iWTI (WTI stands for West Texas Intermediate, a type of crude oil) and if the price of oil goes down by $1, you earn $1. See how it works? You aren’t simply betting against the market, against your city’s economy and your livelihood. What you’re actually doing is hedging. So, if everything around you goes down, at least your iWTI contracts are making you money. This is how hedging with real-world assets works in the decentralized finance world.

These are simple versions and examples of a new system being built by financial architects.

Mass Customization

You might’ve noticed a common theme from this form of ‘personal investment’. The ability to ‘mass customize’. This is exactly what financial architects aim to build, a system where every bit of your ‘personal investment’ can be ‘mass customized’ through something we like to call the ‘money legos.’ 

Money legos are the tools to build your ‘personal investment’ and is customizable to the extent you want. As we’ve seen above you can customize your goal, your assets, your strategies, your synthetics, or your positions. Anything is customizable based on your preferences. 

A mix of growth in one cryptocurrency and income from the other? Sure you can have that! Combining two varied cryptocurrencies as a single token set? Hedging one for the other? Yup, that works! What about trading quickly based on a list of trading strategies? Yeah sure, that’s possible. What if I want to bet against the price of gold and have the income go to a DeFi liquidity pool, and those periodic gains go into a position where I go long on BTC? That’s a tall order, but yeah, it can be done! See the pattern?

More than just finance

Despite laying down a very pro-finance profile of financial architects, we have to stress, finance is only half the battle. The second piece of the puzzle is the programming. For this financial architect system to be in place, not only should the investment management potential be laid out, but also the programming. Through securing the right data from oracles, creating an efficient incentive structure, writing the right code, and developing a strong technological infrastructure, financial architects can build the next realm of customizable finance.

Finance and technology go hand in hand here. Financial professionals are required to build the investment gateways. These gateways will allow investors to invest in a range of assets, for varied goals, and using different platforms. The role of the financial professionals is to create a robust and efficient financial system. The technology professionals are required to create the infrastructure to work in a decentralized manner. With the use of smart contracts, computer programs which are automatically triggered, blockchain technology and digital currencies, as the blueprint, financial architects can size and scale the modern financial system.

Financial Architects: The realization of Fin-Tech

Financial architects are building a system where investing variables, be it goals or assets, strategies or direction, can be controlled and combined for every different investor. In this system, no two funds are the same, because no two investors are the same. No fund is all-encompassing, where different types of investors dump their money for it to be ‘managed’ by a fund manager. Each investor is the manager of their assets, depending on how they’d like to manage them. And this is all coordinated in a system that is decentralized, meaning there are no intermediaries. This decreases a whole bunch of fees and friction!

What financial architects are doing is building the tools for us to manage our money.

You can check out our video on financial architects here.

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