In the game of Doubles Tennis where both players cover each side of their respective courts, a shot that cuts through the middle often ends up winning the point. And so the saying goes: Down the Middle Solves the Riddle. 

However, no such winning strategy appears to exist in Finance. Instead, investment approaches rely on allocating capital to Low & High risk assets for maximizing returns. The “Messy Middle” is avoided because Medium risk assets portend poor risk-reward trade-offs. This concentration on extremes is known as the Barbell Strategy.

Weightings vary according to preference. The risky assets deliver outsized returns in risk-on environments, and safe assets function as a buffer to cushion losses during market downturns. So the theory goes. While this seems like a simple and logical way to construct winning portfolios, “there is no free lunch” as Milton Friedman has said. 

Timing risks can be costly because portfolio managers must actively rebalance assets to maintain specified risk profiles. This is amplified by the extreme volatility in today’s unprecedented financial environment, where high-risk assets have incurred devastating losses; e.g., many stocks IPO’ed following COVID have lost more than 70% of their value. Adding fuel to the fire, “Stable Assets” like Cash (or Stablecoins, if you’re tech savvy) are no longer safe; even the risk-free rate of capital is now itself risky due to Inflation. I.e., the 3-month U.S. Treasury Bill yielding 4.5% - often cited as the risk-free rate - is hardly risk-free in the face of a U.S. Dollar that has lost 10% of its value since January 2025:

So where can investors go now? Is there anything out there that doesn’t seem like an outright gamble?

What if the Middle wasn’t so Messy?

A Not-So-Messy-Middle, for Steady Growth & Value Accrual

Risk is simply (Price) Uncertainty, so we can reframe this as Volatility. Where Zero Volatility Assets (“Safe”) leak value by failing to outpace Inflation and High Volatility Assets (“High-Risk”) succumb to precipitous drawdowns, LOW Volatility Assets (LVAs) from Decentralized Finance (DeFi) represent a breakthrough in financial engineering. 

LVAs offer the best of both worlds: Limited Downside and Predictable Upside.

For example, below we can see how an LVA like SPOT (world’s first LVA - a low volatility derivative of AMPL) can complement a portfolio with BTC holdings. Though BTC offers tremendous upside for investors, the realization of capital gains is dependent on “timing the top.” In contrast, SPOT accrues value steadily over time:

A low volatility derivative of BTC (lvBTC) would output a similar profile.

Low Volatility at a Glance: Split, Stack, & Churn

How does one go about engineering a low volatility Bitcoin (lvBTC)? Below is a high-level visual depiction of the mechanism devised to create low volatility derivatives, with a conceptual “fragmentedBTC” on the upcoming Fragments platform. In this specific example:

1. Price Elastic BTC is transformed into Supply Elastic BTC with the Fragment Wrapper: fragmentedBTC
2. Supply Elastic fragmentedBTC can be tranched into Safe (A-Tranche), Medium (B-Tranche), and Risky (Z-Tranche) fragmentedBTC Tranche tokens
3. For the purposes of creating lvBTC, fragmentedBTC is tranched into Senior A-Tranche tokens and Junior Z-Tranche tokens
4. Because the Senior A-Tranche tokens are insulated from 67% supply contractions over a 28 day period, they can be entered into a rotating set to collateralize a lvBTC

This exact mechanism is employed to create SPOT, which is a LOW volatility derivative of AMPL (lvAMPL).

As an End User, this knowledge can inform your interactions with the upcoming Fragments platform. Alternatively, you can simply add LVAs like lvBTC, lvGold, and lvAMPL (SPOT) to your holdings for portfolio optimization.

Conclusion: Messy Middle —> Goldilocks Zone

LVAs represent a brand new asset class because they preserve volatility by reshuffling it in a transparent manner with minimal information asymmetry. This is markedly different from traditional financial instruments that deleverage or rebalance by eliminating volatility from the product. Furthermore, LVAs obviate many risks & tradeoffs associated with traditional finance portfolio management.

By transmuting Volatility into Anti-Fragility, LVAs transform the “Messy Middle” into a Goldilocks Zone for investors seeking to find an edge in a new age defined by relentless and chaotic uncertainty.

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