Shrimpy has developed one of the most advanced rebalancing systems for cryptocurrency. As a result, there are certain things you should know when executing your rebalances.
Shrimpy Rebalances Use Smart Order Routing
Smart Order Routing is the process of automatically taking advantage of the best price available across multiple market pairs to optimize the outcome of an order. The first iteration of our SOR will evaluate trade opportunities through every available market pair on an exchange to execute this strategy.
Smart Order Routing is a complex real-time evaluation of the market to execute the most optimal trades. Imagine we want to move our LTC position to XMR. On the exchange we are using in this example, let’s say there are 4 different quote currencies that connect these two assets: ETH, XRP, USDT, and BTC. Shrimpy will evaluate each of these routes to find the best path. We’ve even designed Shrimpy to intelligently route portions of the funds through different routes based on the changes in the market, spread, and slippage. The outcome could be numerous trades across each of these quote currencies to successfully reach the destination asset.
This smart order routing system means that Shrimpy will sometimes buy and sell assets that you did not allocate in your portfolio. In the example above, for example, it's possible that you might not have had BTC, USDT, XRP, or ETH in your portfolio. However, Shrimpy might still buy those assets in order to purchase XMR from LTC.
Things to Know
There are a few things to know that result from this smart order routing process that may seem unexpected.
- All exchanges have minimum trading limits in place. These minimums are not put in place by Shrimpy, but must be abided by all Shrimpy users. If Shrimpy tries to make a trade that is smaller than the minimum trading limit on an exchange, the trade will be rejected by the exchange. This is important because if Shrimpy buys an asset like USDT, BTC, or ETH with the intention of buying another asset after, it's possible the second trade might not meet the minimum trade requirements. If this happened, we will keep the funds in USDT, BTC, ETH (or others) until trades can be made.
- Each exchange has different trading pairs available for trading. That means if there is a XMR/ETH trading pair on one exchange, that does not mean it will be available on another exchange. Shrimpy's system tracks the different trading pairs that are available and uses the ones that are available on each exchange.
- The intention of the smart order routing system is to get the best prices possible when going from one asset to another. However, that also means that if you are following a leader, you might not execute the exact same trades as them. That's because there might have been a more optimal route for your trades when Shrimpy was evaluating the market.
- Small balances can sometimes be left in these alternative trading pairs due to not meeting minimum trade limits or other reasons. This is the expected behavior. The best ways to reduce the frequency of these events is to add additional funds to your portfolio, reduce the number of assets in your portfolio, or use an exchange like Binance that has low minimum trading limits.
- The smart order routing system is automatic. There is no way in Shrimpy to turn off this intelligent routing and we don't currently offer any way to configure how these smart order routing decisions are made.
If you have any other questions about how Shrimpy executes trades during a rebalance, don't hesitate to reach out to us at [email protected]!