Dollar-Cost Averaging (DCA)

Discover the benefits of DCA with Ricochet: Save on risk, stress, and time!

What's DCA?

Dollar-cost averaging is the process of automatically investing fixed amounts at fixed intervals. For example: Using a Ricochet rexMarket to buy $1 of Bitcoin every 20 minutes.

By employing this strategy, you're buying less of an asset as its price rises and more as it falls. Think of it like this: $100 will buy more Bitcoin when the price falls and less as it rises. Check out this visualization 👇

DCA Visualization

Why should you DCA?

1. Save on risk

Notice the "number of shares owned" blue shading on the DCA Viz. As you continue to buy BTC, the dollars you've invested rises linearly. The advantage of this is you are taking on price risk gradually and incrementally instead of all at once. You're spreading your buys out across periodic prices instead of one or a few.

2. Save on stress

Buying crypto in lumps is nerve wracking. Even if you believe the token will rise in value, you could have entered at a poor price and end up regretting your decision. Timing the markets can leave investors second-guessing and FOMO'ing into losing bets!
How does DCA help? By incrementally investing your money over a period, you are able to find an average entry price (see the "average price" line on the DCA Viz). This takes out the guesswork, assuring that you aren't entering at a relatively terrible price and that you'll get a good night's sleep.

3. Save on time

Timing the markets is a time consuming process. And in the busy and fast-paced world of crypto, your time and attention is valuable! If you can reduce your investing strategy to just injudicious auto-buying in fixed amounts, you'll spend less time investing and more time doing other cool stuff.

Ricochet DCA Use Cases

🚰 Section created by rexForce contributor, Anthony

For investors

You’re able to exchange part of your salary or income for cryptocurrency over time. Users can decide how much they'd like to invest and do so on a regular basis. rexMarket (our name for this process) utilizes Superfluid’s streams and we have a growing number of token pairs with which you are able to stream in real-time. 

By using Ricochet, you're guaranteed to have a number of versatile investment strategies right at your fingertips.

For traders

Ricochet allows traders to automate slippage-reduction in their portfolios. Traders can enter or exit tokens without significant price impact by spreading out their trades through a rexMarket.

For DAOs and Businesses

For DAOs and businesses, Ricochet makes the process of passive crypto investing seamless by enabling automated diversion of a portion of revenue/treasury into crypto over time. This offloads book-keeping duties for small and large businesses alike while providing a safe and time-efficient way to invest in cryptocurrency.