Dooya MD Kyle Dowie’s first exposure to crypto arbitrage was when he returned from the UK and wanted to repatriate funds to South Africa.

“A friend, who later became one of the co-founders of Dooya, suggested I repatriate those funds through crypto arbitrage, which I knew nothing about,” he says. “Instead of paying banks a fee to bring my money bank, I was told that I could buy Bitcoin (BTC) on an overseas exchange and sell it profitably on a South African exchange. Instead of it costing me to bring money to SA, I made a profit on the trade, which was how I got my first exposure to crypto arbitrage, and then I started to involving my family and friends in it, and before long it had become a full-time business.

And the name Dooya?

“It’s an anagram of the names of the company’s founders,” Dowie explains. The other administrators are David Roux (co-founder and software architect), Jonathan Archer (co-founder and director) and Adam Paardenkooper (co-founder).

While other crypto providers use stablecoins such as USD Coins (USDC) or True USD (TUSD), which are crypto imitations of the US dollar, Dooya sticks to bitcoin because historically it offers superior returns of 10% to 20%.

The website shows that the company generated more than 2,800 trades in the past 90 days, with an average net profit per trade of 1.22%. The maximum profit on a trade during this period was 3.33% net.

Moneyweb sat down with Dowie and asked some in-depth questions about the company.

How long has the company been around?

The company was established in 2018 and started operations in 2019.

Some people still struggle to understand how crypto arbitrage works. Can you explain it?

You buy bitcoin on an overseas exchange at a cheaper price than in South Africa, then sell that bitcoin in South Africa at a higher price to make a profit. It’s that simple.

What is a realistic profit expectation?

Our clients have achieved an average net profit after costs of 1.22% per trade over the past 90 days. Sometimes this profit is higher, sometimes lower. It’s not as high as in years past when net profits were 4%, 5% or even higher, but it’s still worth it. The chart below shows gross profit in orange and net profit in white over the past year.

Source: Dooya

What is the minimum amount people need to start trading?

We recommend a minimum of R100,000.

To participate in crypto arbitrage, you must take advantage of your Special Discretionary Allowance (SDA) of one million rand per annum, for which no approval is required, and your Foreign Investment Allowance (FIA) of one million rand per annum, for which you need Reserve Bank approval, based on SA Revenue Service (Sars) tax clearance.

That’s a total of R11 million per person per year. If you make a net profit of 1.22% on R11 million, that’s R134,000. If you are a married couple, you can double this amount. It is therefore a significant gain.

Many people think you need R11 million to participate in crypto arbitrage. You don’t. You need a minimum of around R100,000, which can be redeemed multiple times up to a maximum of R11 million.

To do this you need to get approval from Sars, and we have a professional accountant who handles these requests, and this is a service we provide free of charge to clients.

Is the Dooya arbitration system fully automated?

Yes. It does not require any intervention from the client.

Can the client designate a target profit level?

Yes, of course within reason. If the client says that I only want to trade when the market offers a net profit of 4%, we will have to explain to him that these situations occur very rarely. A more realistic profit expectation of around 1.2% would be preferable, as this is what we have been able to achieve historically.

What are your fees?

We charge a profit share, so our interests are aligned with those of the client.

We take a 25% profit share on the first R2.5m traded each year and 20% on the rest of the AIF.

Do you hedge your trades to eliminate forex and crypto price risk?

Yes. The two main risks of crypto arbitrage are forex and crypto price movements while the trade is in progress, bearing in mind that it can take 24-48 hours to complete a trade. We are able to hedge both risks, so we know how much profit the customer will earn before they even ship currency overseas to buy BTC. We use our own crypto float to hedge crypto risk.

The only other risks are the counterparty, in other words, the danger that the foreign or local exchange we use goes bankrupt while a transaction is in progress. This is an extremely low risk since we use very well capitalized exchanges.

What is your unique advantage?

I come from a background in software development, like many of my colleagues, so we’ve developed a pretty fantastic algorithm to generate maximum profits for clients. The first step in any business like this is not to make losses for your customers. The second rule is to maximize profits. There are occasions during the year when the arbitrage profit between foreign and local exchanges widens to 5% and even 8%. We are able to capture them – even if they only last a few seconds – and cash in the profits for our customers.

How secure are customer funds?

We are software specialists and security is our main concern. We use multiple layers of security at every stage to ensure the safety of customer funds throughout the transaction process.

Can customers monitor transactions?

Yes, our interactive trading bot allows you to query your trade and see where it stands.

Are you based in Durban? What’s up with that?

Surfing, kayaking and crypto. These are the great philosophical imponderables of our time.

How do people contact you?

Visit our website at www.dooya.co.za. Follow the registration steps here or email [email protected] with your name and we will send you more information regarding registration details.

Presented by Dooya.

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