All You Need to Know About DeXe Investment — DeXe Network’s Flagship Product
Introduction
Need For A Better Way of Earning Passive Income
Investors generally love passive income and always look for platforms that offer real, stable, and long-term rewards. Traditionally, Centralized finance institutions (a company that acts as a channel between savers and investors, assisting them in channeling their funds into various investment opportunities) have been a dependable source in the past. Still, they all have major shortcomings, such as restrictions on the borrowers, the complexity of the process, custody of investors’ funds, etc.
More recently, stock ETFs and Hedge funds have made their way into the world of cryptocurrencies as Crypto ETFs, promising high returns but with a fee of 2.5%, which is a bit excessive for just replicating cryptocurrencies with less than ideal precision. Other Crypto Interest Accounts which promised higher unrealistic APYs have ended up in bankruptcy. It is evident that there is a need to provide a far better method for generating passive income, particularly in the crypto space, where there is a significant demand for it. But how should this be done more effectively?
DeFi Asset Management
Decentralizing the entire system is a better way to generate passive income. Users have more control when authority is removed from centralized organizations that are vulnerable to fraud and mismanagement. This is achieved through DeFi Asset Management.
Platforms already exist in the We3 space that has introduced the fundamentals of DeFi Asset Management, like allowing traders to develop token strategies engaging in non-custodial trades with investor funds. These include TokenSets, Enzyme, and other projects. However, some of these platforms have high fees, poor incentives for the trader/manager, a limited number of authorized token pairs, extra charges, and so on.
There is a product still in development, which is a few months away from its launch. It offers significant advantages over what is currently available in terms of passive income and trading. This product is called DeXe Investment and is being developed by DeXe Network. DeXe investment will impact DeFi trading and passive income production platforms in significant ways.
In this article, we will go over DeXe investment in great depth, covering how it works, the types of funds available, how traders and investors are protected, and so on.
What is DeXe Investment?
This is the product that depicts real social trading in all of DeFi. Dexe Investment connects traders and investors in the most transparent and mutually rewarding ways, allowing for entirely new forms of profit from cooperation. Investors will select a trader whose risk tolerance and strategy are compatible with them. Each market indicator can be altered by the governance of the market participants in this decentralized approach.
All you will have to do is log in, select the traders you want to invest for you, and assign funds to them. The entire process is as simple and transparent as it can be. The best part is having access to the best traders at your fingertips with transparency and accountability to keep your funds safe.
DeXe investment enables investors to entrust their funds to a seasoned (or even better, top-performing) trader and enables automated sharing of the trading fee among all pool participants; hence, high gas costs are suddenly not as big of an issue. It is a single, user-friendly interface that enables users to learn which projects are used by the internal teams.
DeXe Investment provides DeXe’s list of reliable tokens for traders as one governance level to protect investors and traders. In addition, as the second level of governance, each pool’s members vote on a list of assets that its particular trader can trade. In other words, if ETH isn’t deemed sufficiently secure in general, but a specific pool’s members want their trader to forecast its price, they might approve it by decentralized voting. Even better, DeXe Investment pool users can purchase insurance, so they may feel extra secure even when making riskier trades.
Dexe Investment and Proposals
A trader can propose a vote to add an asset to their own personal approved list if they want to trade with one that isn’t on the platform’s general pre-approved list. The trader does this by creating a new proposal for the new asset to be added on the “Voting and Authorization tab.” Before the trader can successfully create the proposal, they must decide how much of their total holdings of that token they would transfer to the smart contract.
With the token in question, the investors will be required to vote on the proposal. If the proposal is approved, the investor’s tokens are all pooled together for the trader to use. If the trade is successful, the profit is shared among the investors in proportion to the amount of the tokens they pledged.
But not all of the funds that the investors have pledged to the trader are automatically available for trading. Each trader on the Dexe Investment platform has a coefficient that establishes how much of their token they must deposit to trade with a particular quantity of investor funds.
For instance, a trader could need to deposit $100,000 in DeXe before using $1,000,000 in investor funds, or the ratio might be 1:1, 1:5, etc. As a result, the trader is encouraged to invest more of their assets, while investors are protected from giving their money to someone with nothing to lose.
The fact that both the trader and the investors are committing their individual holdings of that asset provides a high level of accountability in the mechanism.
Funds and Base Assets
The DeXe investment enables traders to create funds (much like hedge funds) that specify their investment strategy, base assets, and investor participation guidelines. By doing this, traders can enhance their reputation and attract investors.
The choice of the base asset — which may be any crypto asset — which determines all future gains and losses is critical. It will be instrumental in attracting investors and setting different traders’ funds apart. For instance, a trader fund might be the only one in the world to have Elrond (EGLD) as its base assets, attracting investors looking to increase their holdings of Elrond.
Investors have the opportunity to obtain the best traders and strategies on the market while keeping profits concentrated on the asset they care about by having the security of knowing the base asset before even investing in the fund and holding the trader accountable for making a profit for them in this base asset.
Types of Funds in Dexe Investment
Any group, not just traders, can create a fund using the DeXe Investment, including DAOs and startups. The platform’s settings are so customizable that you may assemble your team of fund creators and select the type of fund you wish to establish, which can be quickly divided into sub-fund pools for particular investment/asset strategies.
Each fund can be either public or private to suit the desires of the fund’s creators. Everyone is welcome to contribute to public funds to boost their investing power and gain from the strategy. On the other hand, a private fund restricts participation to the investors who have been previously whitelisted.
We will only explore 2 of the many various types of funds available on DeXe Investment because those are the ones that place the most significant emphasis on investments.
1) Standard Funds
A Standard Fund is any fund on the platform focusing on investments within crypto. It has several built-in mechanisms to make it safe for investors and flexible for traders to pursue various successful strategies. Trading is typically limited to tokens that the DeXe DAO has approved to safeguard investors. A trader’s base asset for the fund and the trading pairs they are permitted to use are subject to the whitelist.
When creating a standard fund, traders must deposit their funds to receive the LP tokens (tokens created when the trader makes a new investment with the whitelisted tokens) in a 1:1 ratio. Investors can subsequently buy or sell the trader/fund’s LP tokens at any time at their current market price. When LP tokens are purchased, they are minted. When sold, they are burned. The same applies to LP2 Tokens (tokens created when the trader creates an investment outside the whitelisted token by depositing some of his LP tokens from the main fund).
2) Investment Funds
Investment Funds are funds created where anything can be the target of investment, such as NFTs, physical art, Real Estate, etc. This feature allows investors and traders to invest effectively in digital and physical world assets, with the potential for very high returns to meet actual collateral value (depending on the asset).
An Investment Fund is similar to a Risk Proposal on standard funds in that the trader creates a pool within his fund and funds it with his LP tokens (creating LP2 tokens). The significant difference is that investor LP2 tokens are not burnt when withdrawn from the pool and can be freely traded with other investors.
Features of DeXe Investment
More specifically, here’s an itemized list of the core features of DeXe investment:
1) insurance:
DeXe network includes deposit insurance against trading losses. These include actual trading losses, not just bugs or hacks. By putting up to 10% of their deposits into the Insurance Pool, investors can have up to 100% of their deposit refunded in certain extraordinary cases resulting in trading loss. These cases are events defined by the DAO through proposals. With the knowledge that some uncontrollable circumstances won’t invalidate an otherwise excellent strategy, traders are given more freedom to experiment with their strategy.
2) Control over traded assets:
DeXe Investment automatically pre-approves a certain number of assets that may be traded and used as the “base” asset in which the trader does his profit accounting. The DAO can add more to the list. But on a more granular level, the investors of a specific trader/strategy can vote on additional assets to add to the approved list by holding that trader’s token. The voting process gives investors more control over how much risk they are exposed to and how much trading is done. However, the trader can convince the investors by voting to add more parameters to those already established by the platform.
3) Own Assets (Personal tokens)
Dexe investment also enables traders to create personal tokens secured by the entire pool of assets in the pool. The value of the trader’s personal token correlates with all the underlying assets it is tied to and rises proportionately as any of the pool’s assets used to back it increases due to profits earned from trading. Instead of earning profits in the pool’s assets, investors who purchase the created token receive all profits (from the five assets) in that token.
4) Invest in anything
A trader’s fund, however, is not limited to different crypto coins. For instance, a trader can create a fund that invests in yield farming or purchases real estate, NFTs, or any other property type. The type of funds a trader can create is limitless as long as they can locate investors willing to contribute capital to the fund.
Problems That DeXe Investments Solves
1) Focus and Invest in your interest
The information in the DeFi ecosystem today is already oversaturated. Even if you locate and specialize in a niche, DeFi is far too broad for one individual to keep track of everything (even though it’s still young). DeXe Investment enables skilled traders to demonstrate their expertise and guide a group of investors into the trader’s preferred approach. Instead of spending hours searching for and studying market data, investors can now just track their chosen trader’s development and technique. So if you are interested in Play-to-earn, NFTs, L2s, or real estate, you can find one trader specializing in each area and invest your funds.
2) Protect your funds from yourself
Those who don’t trade professionally or full-time tend to take on too much risk and lose their money rapidly. By entrusting a professional trader with your money, you are at least providing it to someone whose employment depends on their ability to manage risk and to keep an eye on your funds.
3) Transparency and Trust
Because trading involves dealing with the unpredictability of the future and necessitates relying on traders who, at most, have a better prediction of the future than the ordinary person, it is challenging to find someone you can trust because blockchain is an inherently distrustless technology in that aspect.
Investors can view and respond to a trader’s reputation in real-time with the help of DeXe Investment. Additionally, the trader must incorporate his collateral into his strategy.
4) Insurance
The insurance offered by DeXe Investment provides coverage against specific kinds of trading losses as determined by the DAO. Not some centralized authority or even the DeXe team, but the holders’ community itself. DAO treasury governors decide what trading risks are acceptable and what circumstances call for a refund in this fundamentally novel community-based approach.
5) Power to Small Investors
No matter how little money you have or where in the world you are from, DeXe Investment allows you to pool your cash with other investors into a trader’s plan. With the support of enough investors, each trader has the potential to become a whale. Because it is decentralized, DeFi cannot prevent VCs from entering. We can, however, level the playing field.
Conclusion
DeXe Investment, when fully launched, will be a disruptor because there’s no current product in the entire DeFi that has similar features. There has been an active development of different products since then, and they are all unique. Please visit their website at www.dexe.network to find out more about DeXe.
