How it works
How it works
How F-Star's crypto asset allocation service runs: where the data comes from, how Kelly sizes it, why it's non-custodial, and how everything is verifiable on-chain.
What we believe
“Not how to win. How not to go bust.”
The scarcest thing in finance isn't signal — it's sizing discipline; most people die from over-betting, not from being wrong. F-Star believes what the Kelly formula proved over seventy years: giving up a little to survive the long run beats 'making more', once compounding is accounted for. We turn that discipline into a non-custodial crypto asset allocation service: Kelly-weighted, risk-first, self-executed by you.
Methodology
How we translate the Kelly Criterion into a product
We build process around three things: signal, sizing, risk. Each is necessary — many funds die not for lack of signal but for lack of sizing discipline.
Signal
P, BEmpirical Bayes estimation of p (win-rate) and b (odds), with periodic backtest re-calibration. Every signal must pass out-of-sample thresholds (OOS Sharpe, MAR, Calmar composites).
Sizing
F*Fractional Kelly (commonly 1/4 to 1/2) applied on estimated (p, b), bounded by a multi-strategy covariance matrix that caps total leverage and per-strategy peaks.
Risk
RISKPer-strategy daily stop, portfolio monthly stop, reserve backstop. Any parameter change must be approved by an independent risk committee, traceable on-chain.
Kelly is only the starting point. The real craft is robust parameter estimation, cross-strategy correlation modelling, and the judgement to act when models fail — which only comes from the market.
How it works
From data to live: non-custodial, Kelly-weighted, on-chain
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1 · Data source
Sourced from NovaMarket's public, verifiable track records — strategy leaderboard, operator records, signed daily NAV and settlement events. F-Star consumes public on-chain data only.
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2 · Kelly weighting
Normalize Sharpe into edge, size across strategies by fractional Kelly (quarter by default), layer on risk caps — think about not going bust first.
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3 · Non-custodial allocation
F-Star holds none of your assets: connect your wallet, Kelly proposes the allocation, and you sign to deposit into on-chain strategy pools yourself.
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4 · On-chain settlement & transparency
Allocation, positions, P&L and redemption are all on-chain; NAV is signed-reported and settled daily, verifiable anytime (Arbitrum One mainnet (gray-scale)).
F-Star never takes custody of your keys or assets and never trades for you; Kelly only proposes an allocation — execution always stays in your own wallet.
This service is about the discipline of not going bust, not a promise of winning. Mainnet gray-scale phase · not investment advice · no return promise; projections are targets/estimates.