An introduction to fund management agreement Melon | on the ethereum chain

Source: Babbit

Author: Porridge left over

The start-up and operation of investment funds today is a difficult and capital-intensive job in the traditional world. To a large extent, applicable laws and requirements stem from such an ideal: the protection of investors.

The practice of investment management is hampered by a bewildering array of laws, regulations and requirements. Individuals or organizations wishing to engage in investment management activities must be able to bear the costs involved. Initially, there were direct costs, such as legal and regulatory fees, setup costs and service provider costs. Running a foundation has other indirect costs, such as back-office support staff, IT systems and regulatory reporting to meet requirements. This means that managed funds are only viable after a certain amount of assets are under management. This barrier to entry reduces the number of managers, thus creating a monopoly effect.

Can blockchain reduce related costs and protect investors?

What is Melon Protocol? & have spent

Melon, a decentralized, open, unlicensed infrastructure for the secure management of cryptographic token assets on the Ethereum blockchain, aims to become a low-cost alternative to the existing fund management ecosystem.

Put simply, Melon allows anyone to:

· Deploy an on-chain fund on the Ethereum platform whose operation, management, accounting and regulatory functions will be fully automated through technology and executed on the chain.
· Define the parameters that control the fund's behavior: fee structure, authorized participation assets, investor white list, etc.
· Select a decentralized exchange (OAISDEX, 0X, Kyber, Uniswap, etc.) to trade on.
· Invest in your own funds or participate in funds created by others.
· Redeem your share in Melon Fund;
· Track and observe the fund's indicators (NAV, GAV, price per share);
· Track and collect management fees and performance fees;
· Close your fund permanently;

Compared to a traditional fund, all assets in a Melon fund are still held by the investor and can be redeemed at any time.

By enabling investors to retain custody of their assets and enforcing fund parameters on the blockchain through smart contracts, Melan could in theory significantly reduce cases of fraud or malicious behaviour by fund managers.

How do you build a fund from Melon? & have spent

The Melon agreement is essentially a set of smart contracts that each perform specific functions of an investment fund -- accounting, investment/redemption, asset management, trading, fee allocation, etc. -- and are bundled together through a Hub contract that co-enacts the fund's behavior and enacts the fund's rules. These smart contracts set the parameters for the fund, enabling managers to make decisions about the range of investable assets, the set of risk management rules, management and performance fees, and data feeds.

So far, 300 funds have been created through Melon, involving about 3,694 ETH ($840,000) and 311 investors, leaving the number of participants and the amount of money involved as poor compared to traditional funds.

We can use the most representative fund on this platform to understand this agreement:

Rhino Fund, launched in April 2020, currently has about 2298 ETH under management, or 62% of Melon's total assets under management, with parameters such as Fund management fees, performance fees and cycle set by the Fund manager.

So how do you set up such a fund?

In fact, the process is relatively simple. First, log in through MetaMask, click Create a Fund, and then input the fund name, fund management fee, fund performance fee, cycle and other parameters successively (management fee and performance fee can be set within 0-100%, default is 1% and 10%, cycle can be set at will, default is 90 days).

Then, you only have DEX and investment assets supported. At present, the Melon Protocol supports only investment assets, MLN, ANT, BAT, DAI, KNC, LINK, MANA, MKR, REP, REN, RLC, SAI, USDC, WBTC, and ZRX (additional assets will be added later).

Note that before you create a fund using Melon, you need to know whether the financial laws and regulations of your jurisdiction will permit the use of the fund, as Melon says in its disclaimer:

"Before using MELON, seek legal aid to ensure that you can use the software in accordance with applicable law. Otherwise, you may face criminal or civil penalties in one or more jurisdictions." Ignore this for a moment, and once you set the parameters, you'll have to pay a fee, like when I wrote this,A fee of approximately $20.44 is required.

This transaction stores all the parameters associated with the new fund and creates a framework for the new fund.

After that trade affirmatory, did fund create finished?

Unfortunately, no, you need to create an account agreement, a fee manager agreement, a participation agreement, a policy manager agreement, a fund share agreement, a trading agreement, and a Vault agreement to complete the process.Of course, there is a cost associated with each process.

Note: Because ethereum's main network is currently congested, the cost of creating the entire fund far exceeds the advertised $50 or less, so I have chosen not to continue for the time being (until subsequent networks are free of congestion).

Thus, creating a fund from Melon is not a threshold because of the limited performance of the Ethereum host network, which would be significantly reduced through Layer 2 or Ethereum 2.0.

There are two very important concepts involved, NAV (Net Asset value of the Fund) and GAV (Net Asset value before taxes and fees). The price of the fund is quoted on a per-share basis, namely NAV /Share. NAV and GAV will fluctuate with the market price of the underlying asset held by funds. At present, Melon funds only support long exposure positions and cannot be leveraged. This means NAV will be GAV minus unclaimed expenses at a given point in time.

Management and safety of Melon Agreement

Melloport AG dissolved its promise after delivering Mellow V1.0 in February 2019, leaving protocol governance to a decentralized Melon Committee governance system, which was a DAO organization.

The DAO of Melon Council, customized based on Aragon, is capable of local interaction with the Melon protocol.

The committee's long-term tasks include:Maintain network integrity; Maximize user adoption; To promote innovation and increase the attractiveness of the Internet; Indeed, the Melon Council is responsible for the following: agreement escalation; Resource allocation; At present, The Melon Council is composed of REPRESENTATIVES of MTC and MEB.

Current MTC members include Janos Berghorn, Fabian Gompf, Parity Technology VP, Will Harborne, DeversiFi's chief executive, Martin Lundfall, a former formalized validation researcher at the Eitfang Foundation, and Mona El Isa, chief executive of Avantgarde Finance.

As a result, the composition of the Melon Council is relatively dispersed and open to the public, so is the membership of MTC or MEB.

Also, Melon security is important to the Melon Council, as Melonport has been audited by multiple third parties, including Authority, ChainSecurity, and also offers a vulnerability incentive scheme, currently available as 247,989 DAI.

conclusion

Overall, Melon is a decentralized fund agreement maintained by the Melon Council DAO organization, which currently supports only a handful of DEX and a few Ethereum ecological assets, and due to limitations on ethereum's main network,The threshold of a Melon is relatively highBut for traditional funds, it's definitely a big step forward, and the biggest problem users face when using it,One is the security of the contract, and the other is the supervision.

Resources:

1, https://medium.com/melonprotocol/introducing-the-melon-terminal-a81a9c5e766e

2, https://melonprotocol.com/docs/governance/

3, https://melon.avantgarde.finance/

原文链接： https://www.8btc.com/article/611724

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