By the end of 2020, the global asset management industry had over $100 trillion assets under management (AUM).
New York, New York--(Newsfile Corp. - May 4, 2021) - DePlutus, the next generation asset management protocol, plans to deploy on BSC chain in the first week of this May, the first on-chain fund platform alive on BSC.
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DePlutus Protocol, already alive on Ethereum mainnet this April, is a dark horse player in the DeFi asset management category, featuring a series of innovations and novel functions to improve the shortcomings of existing protocols of this kind, as well as deliver premium return and additional liquidity to their on-chain fund investors.
In April 2021, the Total Value Locked (TVL) in DeFi exceeded $100bn. By the end of 2020, the global asset management industry had over $100 trillion assets under management (AUM). The collision between DEFI and the asset agreement has attracted the attention of users and has become the next hot plate of DeFi. However, previous asset management agreements faced the "DeFi Impossible Triangle" in terms of efficiency, security and high returns, which resulted in the limited development of asset management agreements.
DePlutus Protocol, provides the solution to this "impossible" question with a series of innovations such as fund-specific token, comprehensive risk control mechanism, and the ability to interact with mainstream DeFi applications, empowering the asset management protocol to catch up with pace of DeFi development without compromising the openness and fairness of DeFi on-chain fund.
More importantly, DePlutus is the first DeFi asset management protocol to enable the fund specific token function. The investor will receive the fund-specific tokens (DF Token) after investing in the funds on the platform. The fund specific token represents the investor's share of ownership in the fund and is priced in proportion to the fund's current value. It can be transferred and traded, as well as staked for liquidity mining in mainstream DeFi applications such as Aave, bringing greater liquidity and capital efficiency to investors.
In addition, DePlutus users can follow the target fund manager to invest in the fund on the platform, without disclosing their private keys. Fund managers can only perform investing by invoking smart contracts. In this way, there is no need for mutual trust between the investors and fund managers during the on-chain fund operation period to fulfill the concept of "No Trust, Just Verify".
With the current on-chain asset management sector already having more mature protocols such as TokenSets, dHEDGE and Enzyme, DePlutus, the latest player on the market, has not only absorbed the advantages of the first entrants, but also delivered a satisfactory solution to a number of key pain points.
Pain points of asset management market
Before the emergence of decentralized on-chain asset management, Token Fund was a relatively common way for crypto asset investment in the blockchain industry. Like traditional off-chain funds, Token Fund still suffers from the persistent problem of black-box operation, which is further amplified by the fact that the funds raised are in the form of anonymized crypto assets.
So, it seems that the emergence of the next-generation DeFi asset management protocol is much desired. For retail investors, decentralized asset management platforms use smart contracts to fulfill the initialization, investment and redemption processes of funds, completely avoiding the trust crisis under the traditional model; for institutions, users can leave their idle capital to be managed by funds on the platform, thus getting a share of the pie in areas that require certain technical capabilities to achieve.
Although such a DeFi asset management market has great potential, it also faces new challenges beyond solving, such as high entry barriers, limited investment categories, and high gas fees, etc. DePlutus offers a series of solutions to these pain points. With its debuts on the booming BSC ecosystem, DePlutus will have an advantage on gas fee reduction and deliver better user-experience to the on-chain fund investors. DePlutus also plans to deploy on Heco chain to cover the maxim investors and is well-positioned on the DeFi asset management arena.
Lower access threshold
Existing asset management platforms such as TokenSets and Enzyme refer to traditional fund products and set strict entry barriers for fund managers. To some extent, this approach does avoid some of the risks, but it also keeps out those professional investors who have the ability to invest but not the qualifications, and it goes against the decentralized spirit of DeFi. The DePlutus protocol, combined with the risk control mechanism, allows anyone to initiate a fund without the need for strict qualification checks.
While lowering the entry barrier for fundraisers, DePlutus requires that fundraisers must invest a certain percentage of their own money and can only invest in whitelisted cryptocurrencies or invoke whitelisted DeFi protocols to prevent possible mischief from an overly lenient policy. It can be said that this is a more open platform with more room for investors to choose compared to the past.
Enriching investment portfolios
DePlutus has established a whitelist mechanism, whereby fund managers who wish to add new crypto assets to their portfolios can initiate a poll of investors and those who pass the poll will be added to the whitelist. This expands the portfolio and prevents managers from investing in highly risky assets.
Reducing gas fees
As the price of ETH has significantly increased, so have the gas fees. DePlutus has now deployed Ethereum, BSC, and Heco, which cuts gas fees and increases transaction speed for on-chain fund investors.
Supporting exchanges' public chains will also bring more users to the platform. At present, a large number of users of CEXs only know about blockchain in terms of bitcoin. The on-chain fund protocol is both a need and a boon for newcomers to crypto asset investment.
Asset management is a key piece of the DeFi Lego
Although DeFi is highly open, this openness does not mean a lower threshold. With the Internet already so advanced, there are still people who have difficulty using the functions of mobile apps proficiently, not to mention DeFi, whose current usage experience is completely incomparable to traditional Internet platforms. If investors in traditional funds are still within the range of common sense in terms of their knowledge of the underlying investment, DeFi may have gone far beyond their understanding.
So the future investment in the blockchain industry may still be like the traditional financial market today with the trend of institutionalization, and because of the special nature of the industry, this trend may come more quickly than expected.
By using the traditional asset management industry, which has survived for a century, as a reference and comparison, global fund managers are currently managing about $100 trillion of assets. The booming DeFi world, along with the rapid growth of mainstream crypto assets, coupled with the development of synthetic asset protocols, the total amount of on-chain assets in near future still has huge imagination, and on-chain asset management is a very important piece of the DeFi Lego in such a hefty market.
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