DePlutus, a decentralized asset management protocol, is trying to use on-chain fund tokenization and an innovative design deeply nested with mainstream DeFi to explore the possibility of breaking the “DeFi Impossible Triangle” that combines efficiency, security and high yield.
Written by: Eric
DePlutus is a decentralized asset management protocol for encrypted assets. Users can choose their favorite or approved fund managers to invest on the platform, while the platform still allows users to manage their own private keys. Fund managers can only use the intelligence on the chain. The contract operates on the funds invested by the user. In this way, the user and the fundraising team do not need to trust each other to complete the investment without risk.
For related introductions to the DePlutus agreement, please refer to ” Three minutes to understand DeFi asset management agreement DePlutus “
At present, the on-chain asset management track already has more mature agreements such as TokenSets, dHEDGE, and Enzyme. As a latecomer in the market, DePlutus has not only absorbed the advantages of first-entrants, but also handed over the key pain points. A satisfactory answer sheet.
Pain points of the asset management track
Before the emergence of asset management on the decentralized chain, Token Fund was a relatively common institution in the blockchain industry that resembled a “fund” in the traditional financial market. Like traditional funds, Token Fund still has the stubborn problem of black box operation, and the form of funds raised is anonymized encrypted assets, this problem is further magnified.
In addition, with the outbreak of DeFi, the arbitrage opportunities in decentralized protocols such as DEX and lending are unprecedentedly huge. Coupled with new revenue models such as liquidity and mortgage mining, the traditional asset management model is decentralized. Gradually loses competitiveness in the world.
From this point of view, the emergence of decentralized asset management agreements is what everyone expects. For ordinary investors, the decentralized asset management platform uses smart contracts to control the investment, use and redemption of funds, which completely avoids the trust crisis of investment under the traditional model; for institutions, they can hand over idle funds Funds on the platform are managed to get a share of the field that requires certain technical capabilities to achieve, for example, the profit of Ethereum MEV.
Although such a new track has great potential, in addition to solving the problem of centralization, decentralized asset management also faces new problems, such as high entry barriers, restricted investment categories, and high chain fees. DePlutus provides a series of solutions to these pain points.
How is DePlutus different?
Lower barriers to entry
Existing asset management platforms such as TokenSets and Enzyme refer to traditional fund products and set strict entry barriers for promoters. To some extent, this approach does avoid some of the risks, but at the same time it keeps people with investment capabilities but no qualifications out of the door, and it also violates the decentralized spirit of DeFi. In the DePlutus agreement, in combination with the risk control mechanism, anyone can initiate fund-raising requests without strict qualification review.
As mentioned above, the potential benefits of arbitrage and liquidity mining in DeFi cannot be viewed from a traditional investment perspective. On the contrary, technical personnel who are well versed in the DeFi mechanism have a better say.
While DePlutus lowers the entry barrier for fundraisers, it requires fundraisers to invest in a certain proportion of their own funds, and can only invest in cryptocurrencies protected by the whitelist or call the DeFi protocol on the whitelist to prevent too loose The evil that the policy may bring. It can be said that this is a more open platform, and investors have more choices than before.
Enrich investment categories
DePlutus has established a whitelist mechanism for investment targets. If fund managers want to add new assets to their investment portfolio, they can initiate a vote with investors, and the targets that pass the vote can be added to the whitelist. In this way, it not only expands the investment target, but also prevents managers from investing in excessively risky assets or deliberately doing evil.
In addition to the richness of asset targets, the DePlutus agreement adds modules for futures and options trading, which can avoid risks and maximize returns when the market adjusts.
The most interesting thing is that DePlutus first realized the tokenization of fund shares in the asset management track. Just as the shares of traditional fund products can be packaged and traded in the stock market, tokenized chain fund shares can also be traded, and the price is determined by the net value of the fund.
However, the role of tokenized fund shares in DeFi is much more than that. In addition to building a pool in DEX for trading, share tokens can also be used as assets in AAVE, Compound for mortgage lending and as a liquidity pool LP to obtain additional DePlutus project governance tokens (PLUT). This not only makes investors’ funds more flexible, but also allows investors to have the enthusiasm to participate in project governance, which can be said to give full play to the characteristics of DeFi.
Reduce transaction friction
As the price of Ethereum gradually rises, the gas fee also rises. At present, for a transaction on Uniswap, the handling fee may reach dozens of dollars, and many small and medium investors are “persuaded” and forced to invest in a new public chain with lower handling fees. DePlutus currently supports BSC and Heco in addition to Ethereum. For project investors rather than arbitrageurs, it reduces transaction fees while also increasing transaction speed.
Supporting the exchange public chain will also bring more users to the project. At present, a considerable part of the users who use CEX have their knowledge of the blockchain only stay on Bitcoin, but just as the hot fund last year brought many users who have never set foot in the stock market, the “fund” on the chain has an effect on encrypted assets. For new investors who are investing, it is just need and good news.
On-chain asset management is an important puzzle for DeFi to break the circle
Although DeFi is highly open, this openness does not equate to a low threshold. Today, when the Internet has been so developed, it is still difficult for some people to use the functions of mobile apps proficiently, let alone DeFi whose current experience is completely incomparable with traditional Internet products. If in the investment of traditional funds, investors’ understanding of the investment target is still within the scope of common sense, then DeFi may be far beyond their scope of understanding.
Therefore, in the future, investment in the blockchain industry may still have a trend of de-retailization like today’s traditional financial market, and because of the particularity of the industry, this trend may come faster than expected.
If you use the traditional asset management industry that has existed for a hundred years as a reference and comparison, global fund managers are currently in charge of huge assets of more than 100 trillion US dollars, then the booming DeFi world is accompanied by the rapid growth of the market value of mainstream crypto assets, plus With the development of the synthetic asset protocol, the total amount of assets that the blockchain can carry in the future still has huge room for imagination, and asset management on the chain is a very important piece of the puzzle in such a world.
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