Current market background
Currently, the cryptocurrency market has entered a bear market, with large fluctuations in various coin prices. As a result, investors are increasingly demanding stable asset management. Unlike traditional fund models, a new model has emerged that combines blockchain with fund management — decentralized asset management products. These products provide diverse chain-based investment choices while also maximizing asset security for investors.
Decentralized asset management products refer to asset management that is managed by blockchain smart contracts and decentralized applications, which enables a transparent, secure, autonomous, and trustless asset management model. It not only provides more diversified investment options, but also allows investors to invest and redeem using digital currencies without the need for intermediaries and audits by traditional financial institutions.
Comparison between traditional and decentralized asset management
Compared to traditional asset management products, decentralized asset management products have many advantages.
First, transparency is a major advantage, since the transaction records and contracts of decentralized asset management products are based on public blockchain technology, every transaction is immutable, and a high degree of transparency and trust is provided for investors. Second, security is another advantage, since the assets of decentralized asset management products are stored on the blockchain and have a distributed nature, they are not vulnerable to any single point of attack or loss, providing the highest level of security.
Moreover, decentralized asset management products offer more diversified investment choices for investors. Decentralized asset management products can invest not only in cryptocurrencies, but also in tokens and stablecoins issued on blockchain technology, enabling multi-currency holdings and diversified investment portfolios, meeting the needs of different investors. In addition, because decentralized asset management products adopt decentralized management, they can be more flexible in asset allocation and adjustment, allowing them to respond to market changes and risks.
1. Enzyme Finance
Enzyme is a veteran decentralized asset management (also known as on-chain asset management) protocol.
It was originally launched in 2016 and is one of the earliest ICOs and dApps on Ethereum. Its vision is simple — to put hedge funds on the blockchain. The project currently has around 1300 “Vaults” — most are structures that resemble funds that exist on the chain or are managed by on chain managers; some are DAO treasuries managed by DAO members. By using Enzyme Smart Vaults, individuals and communities can build, scale and monetise investment (or execution) strategies that employ the newest innovations in decentralized finance.
2. Nested
Nested provides decentralized portfolio management & copy trading experiences to users. Similar to Enzyme, users can create their own crypto portfolios and earn the management fees. It also allows users to copy from other traders.
3. dHedge
dHEDGE is a decentralized set of open-source smart contracts operating on the Ethereum Virtual Machine-based blockchains. It’s an asset management protocol that facilitates a censorship-resistant and non-custodial connection between individuals seeking to allocate funds and asset managers.
4. DeFund Protocol
DeFund Protocol is a decentralized fund investment protocol. It consists of a series of smart contracts that allow anyone to use contracts to manage the fund’s assets, enabling decentralized investing.
Compared to other similar products, DeFund provides not only security and transparency, but also smooth and centralized-like trading experiences to users.
Users may interact with the contract at any time to implement fund operations without any third party’s authorization or permission.
DeFund Protocol opens in a new tab with Uniswap. The protocol breaks new limits by linking Uniswap’s exchange and liquidity market makers, ensuring not only decentralization, but also perpetuation using the permissionless liquidity provided by Uniswap V3. Whether you are bullish, bearish, or volatile, you can achieve higher returns with different strategies.
By setting the dual rate of Management fee and Carry, the protocol enables both GP and LP to obtain higher returns, and LP does not have to worry about the security of funds. All funds are in the contract, and it has the right to redeem its own funds at any time. LP may also deposit or redeem at any time, depending on the Fund’s returns, all without the consent or authorization of any third party.
Ending
With the rapid development and application of blockchain technology, the rise of decentralized asset management products is an inevitable trend. Decentralized asset management products not only provide more diversified investment choices, but more importantly, they realize the highest degree of transparency and security, providing more reliable protection for investors’ assets.
As more investors become aware of the advantages of decentralized asset management products, we can expect to see an increase in demand for such products and a corresponding growth in the blockchain-based asset management market. This trend will shape the future of the asset management industry and will bring about more efficient, transparent, and secure processes for investors. Overall, decentralized asset management products are not only a valuable addition to the financial landscape, but they also represent an important step towards a more decentralized and democratized financial system.