How the RangeScout bot works
A computer program manages a small pot of its owner's money on two networks (Solana, and Robinhood's own network) and shows every move it makes on the track record page. This page explains, in plain English, what it does, what stops it doing anything rash, how it checks its own work, and what it cannot promise.
The whole idea, in one sentence
Earn steady fees on coins we would be happy to keep anyway, and never bet on prices going up. The fees decide which pools it picks, the risk decides which ones it refuses, and hoping a coin goes up is never a reason to do anything.
First, what is it actually doing?
Imagine a bureau de change at an airport. People come to swap pounds for euros and back again, and the bureau keeps a small fee on every swap. On the internet there are automated bureaux de change for digital coins, called liquidity pools. Anyone can put a pair of coins into one, and in return they get a share of the fees from everyone who swaps through it.
The catch is that the bureau is always holding whichever coin people have been selling. If one coin falls in value, you end up holding more of the one that fell. The fees are your pay for taking that risk. Do it well and the fees outweigh the loss; do it badly and they do not.
The RangeScout bot is a computer program that does this job automatically with its owner's own money. It chooses which pools to join, how much to put in, when to collect the fees, and when to leave. Everything it does is written down and shown on the track record page.
How it chooses
- Make a list of every pool worth a look. Every four hours the program looks up all the pools on two networks (Solana, and Robinhood's own network). For each one it notes how much money is in it, how busy it is, and what the two coins are worth in dollars. Anything too small, anything whose coins cannot be priced, and anything with unusual custom rules is crossed off straight away, before a penny is spent.
- Only coins we would be happy to hold. Because you always end up holding the coin that fell, the program will only join pools whose coins pass a background check. Well-known coins like Bitcoin and Ether, and dollar-pegged coins, are trusted. Tokens that track big company shares are allowed, but only when paired with a dollar coin. Anything else is investigated first: who made it, whether the code has been audited, whether it has ever been hacked, whether the creators can print more of it at will. A coin that fails is refused. A coin that passes but is young or little-known gets only a small allowance to start with.
- Work out what the fees would really be worth. For each pool that is left, the program takes the last six months of price history and plays it forward 64 different ways, like shuffling a deck and dealing it again, so no single lucky or unlucky run decides the answer. For each of those futures it works out how much fee income it would have earned, how much it would have lost from holding the falling coin, and what it costs to get in and out. Pools are ranked by fees after costs. It also looks at the worst outcomes and refuses anything where the worst case is too painful.
- Ask for a second opinion. Before money moves, a separate program with access to the internet reads the report and checks the news about both coins and the pool: any hacks, any planned releases of new coins that could push the price down, any signs the pool is too shallow for the amount involved. It says agree, caution or object, and shows its sources. For now this is advice only. Its opinions are kept and scored against what actually happened, and it will only get the power to block a trade once its record shows it deserves it.
- Carry out the order, carefully. The part of the program that actually moves money is deliberately simple. Every order comes with its own safety limits: the worst price it will accept, a ceiling on how much a big swap is allowed to move the market, a reserve kept back for network charges, and a rule to wait when those charges are unusually high. Every order is rehearsed on a copy of the network before it is sent for real. If anything fails a check, the order stops and the money stays put.
What stops it doing anything rash
- It never puts more than a set share of the money in one pool or on one network, and it never has more than a handful of positions open.
- Once it joins a pool it stays at least a month, and it will not shuffle a position more than once a month, unless the numbers for that pool have clearly gone bad.
- If prices drift outside the band a position covers, it waits a full week before moving. Prices often wander out and come back; moving every time would cost more than it saves.
- Fees are gathered up and reinvested only when there is enough to be worth the cost of doing it.
- Every order is rehearsed first. If the rehearsal fails, the order is cancelled. The limits are never loosened to force it through.
- The owner can pause or stop the program at any moment, and gets a message on his phone for every action, every failure, and whenever the program falls silent.
How it checks its own work
- New rules are tried on paper first. Whenever a stricter rule is being considered, the program keeps a note of what that rule would have done on every decision, without actually doing it. That way it can be judged on the real record before it is trusted with real money.
- A rule only goes live when it has earned it. Once a day the program looks at every rule on trial and asks: on the decisions this rule would have vetoed, did we lose money or make money? Only after enough time, enough decisions, and a clear saving does the rule go live. If a live rule starts costing money, the same test takes it off again.
- Its forecasts are marked like homework. Every time it joins a pool it writes down the fee income it expects. Every day afterwards it writes down what it actually earned. If it is consistently too optimistic about a type of pool, future forecasts for that type are scaled down.
- Someone checks its work each week. Once a week an independent review reads the full record, checks that the program is doing what it was built to do, and writes up what it found.
Proof, not promises
The track record page shows, for every pool the program joined, the fee income it expected beside the fee income actually earned, read from the networks every half hour with the owner's own deposits and withdrawals kept out of the figures; where the money came from and went (fees, charges, what the coins would have done if simply kept, and the loss from holding the falling coin); and a diary of every decision with the second opinion on it.
What it is not
- This is not free money. The fees are payment for taking on the risk that one coin falls. A big enough fall costs more than the fees. The program manages that risk; it cannot remove it.
- The forecast assumes a pool stays about as busy as it has been recently. In small pools that has sometimes been far too generous, which is exactly why there is a cap on what the program will believe, and why its forecasts are checked every day.
- Replaying the past cannot invent something that has never happened before, such as a hack or a coin suddenly becoming worthless. The background checks and the second opinion exist to cover what the arithmetic cannot see.
- The track record is only weeks old and the sums are small. Please treat the figures as a method being tested in public, not as a return anyone should expect.
Questions
What does the program actually do, in one breath?
It puts its owner's money into automated bureaux de change for digital coins, chooses the ones where the fees are worth the risk, collects the fees, and only moves when it has good reason. Everything it does is published on the track record page.
Is this a fund I can put money into?
No. It is a personal program trading its owner's own money, and this page simply explains how it works. Nothing here is an offer or a recommendation to invest, and no fund or pooled product exists. If that ever changes, it will be done through the proper regulated route and announced separately.
How do I know the results are real?
Every half hour the program reads the actual balances on the two networks and publishes them: what is in each pool, the fees earned so far, and the total. Money put in or taken out by the owner is spotted and kept out of the return figures. The numbers are measured from the networks, not typed in, but they are not audited by an accountant.
What is this "loss from holding the falling coin"?
The technical name is impermanent loss. If you put £100 of coin A and £100 of coin B into a pool and coin A halves in price, the pool automatically leaves you holding more A and less B, so you end up worse off than if you had simply kept the coins in a drawer. The program works this out for every scenario it considers, and the track record shows the real figure for every position.
Which coins will it hold?
The big well-known ones, dollar-pegged coins as the other half of each pair, and tokens that track large company shares as long as they are paired with a dollar coin. Anything else must pass a background check first, and even then it starts with a small allowance until it has earned a month of real fees.
Can I see the account?
No. The account addresses and the individual transactions are never published, for security. The page shows which pools, on which network, how much, what was expected, what was earned, and every decision.
Important. This page describes a personal program trading its owner's own money. It is an explanation of a method, not an offer, invitation or recommendation to invest in anything, and no fund or pooled product exists. You can lose money doing this. Figures on the track record page are read from the networks and are not audited. Account addresses and individual transactions are never published.