Funds on Dexe Investment and how to invest in them

Table of Contents

• First of all, what are “Funds”?
• Standard Fund
• — Who is a TRADER on Dexe Investment?
• — Risk Proposals and LP tokens
• — How to create a risk proposal on Dexe Investment
• — LP tokens
• Investment Funds
• — LP tokens
• — Security Measures on investment funds
• — Use cases
• DAO Funds
• — How to create a DAO
• — Features of Dexe DAO Funds
• How to select a suitable fund (pool) — A guide

In my previous article, I talked about DeXe Investment as an introduction, covering how it works in general and how it was designed to produce high returns for traders and investors.

This article will explore the various types of funds available on Dexe investment and how investors can collectively invest safely in these funds. We will also explain the mechanism involved in the different fund types present in DeXe Investment.

First of all, what are “Funds”?

Generally, in traditional finance, a fund is a pool of money from one or several investors to profit from a particular investment strategy.

💡 Funds perform the same function in Dexe investments, but much more conveniently. On Dexe, traders create funds to accept investments from participants. Funds enable the collective deposit of money from various investors because they are a collection of pools, each of which operates according to its own set of conditions and parameters. The trader can then use this money to engage in trading. Funds can be created by any group of people, not just traders, including DAOs and startups. The entire procedure is simple and adaptable and only needs to be completed in a few steps.

Depending on the fund creators’ preferences, each fund can be either public or private. Anyone can join a public fund to boost its capacity for investment and gain from its strategy. On the other hand, a private fund restricts participation to whitelisted investors only.

For example, Mr. John, a member of XYZ DAO, can create a public fund for the members of his DAO to deposit and invest in the pool collectively. The members will then share the profit that the pool generates. Likewise, Mike, an expert trader, can also create a private fund to allow deposits from only a particular category of investors. He sets the conditions that each investor must satisfy to be eligible to be accepted into the fund. The use cases are enormous, and users can utilize them in diverse ways.

At this point, you must wonder what items these funds can accept as investments. What tokens can fund creators use as base assets for funds created on DeXe investment? In DeXe investment, there are three types of funds, and they are, Standard Funds, Investment Funds, and DAO Funds. Let’s examine each separately as they address various issues in the Defi space.

1) Standard Fund

A Standard Fund is any fund that focuses on investments within crypto. A trader who wishes to trade in DeXe investment creates a standard fund. Suppose a potential investor is comfortable with the fund’s tokens (or coins), the strategies of the pool, and other statistics of the pool. In that case, he may invest in the pool and be eligible to get a portion of the trader’s profits from that pool. To protect investors, DeXe provides a list of whitelisted tokens that the trader must use for trading.

Who is a TRADER on Dexe Investment?

A trader is someone who creates a standard fund on Dexe Investment with the sole intent of accumulating investor funds into the pool and using those funds to engage in cryptocurrency trading. Who can become a trader on Dexe investment?

Some of the people who can become a trader on Dexe Investment are:

1. Crypto influencers from YouTube and TikTok could create a fund to show their audience that their signals are solid and they can put their money where their mouth is.
2. A DAO can create a fund to enable its participants to profit from its trading techniques, both for the benefit of its participants and for the DAO itself.
3. A professional trader seeking to maximize profits from cryptocurrency trading by utilizing his extensive knowledge and skills can take advantage of Dexe investment Standard Funds.
4. A newbie or beginner trader who wants to develop their portfolio and reputation over time can leverage the potential of Dexe Investment.
5. The most obvious benefit is that ANYONE may sign up as a trader on Dexe Investment and then utilize all the resources it provides and all the investment capital it draws, not to mention the reputation-building potential that it can offer as the top social trading marketplace in Defi.

Risk Proposals and LP tokens

These are some of the measures Dexe Investment has implemented to guarantee the highest level of security for investors.

💡 When a trader wishes to use or add tokens that are not on the whitelist, he creates a proposal which is called a RISK PROPOSAL. This proposal must be voted on and approved by pool investors to add the token. With this proposal, a sub-pool will be created within the fund, and the trader will be able to set restrictions on the sub-pool’s time and investment cap.

How to create a risk proposal on Dexe Investment

1. The trader specifies which tokens he wishes to purchase and which he plans to trade with. This can be any cryptocurrency coin.
2. The trader then creates the proposal, detailing all the specifications for the sub-pool, including its duration, minimum and maximum caps, etc.
3. After the investor has accepted the proposal through votes, the trader will go ahead to purchase the proposed token. NOTE: the trader must invest in the risk proposal using his LP tokens from the main fund. No investor can invest more money into a risk proposal than the trader has put in.
4. Investors can invest in the risk proposal pool at this stage to enjoy profit from the trades in the pool.

LP tokens

In one of the earlier parts of this article, I must have mentioned LP tokens, and I know you’re curious about what they are. They are, in fact, very different from what we used to know in Defi farming which we have been accustomed to. Let me briefly describe what they are.

💡 LP tokens are tokens that are regarded as temporary tokens on the Dexe platform. When a trader or investor deposits funds into a pool (fund) using a single token, such as ETH, that token is divided proportionately among the pool’s whitelisted tokens or tokens included in its risk proposals. Your divided tokens are known as LP tokens. These tokens reflect profits and losses in accordance with the trades the trader made using them.

Let’s use an illustration to help you understand better:

The trader deposit USDT into the pool and splits them into 10% ETH, 60% DEXE, and 30% BNB so that he can use it for trading. The trader will receive LP tokens in that percentage. Similarly, When a new investor joins the fund, his funds are converted to an “active portfolio trading fund,” which means they will be split proportionately based on the fund’s current holdings. Considering the previous example, a new investor will receive LP tokens of the fund representing that 10/60/30 split when they join. So, if they invested 1000 DEXE worth $3000, they would get LP tokens worth $300 ETH, 1800 DEXE, and $900 BNB.

The LP adjusts as trading continues in the fund (pool), and when the investor wants to exit, his profit is calculated based on both the trading activity that has taken place in the fund since his entry and the price changes in the underlying assets over that period. The LP tokens are burnt on withdrawal from the pool.

If you’re interested in learning how to find the best trader or fund (pool) on Dexe investment, do not worry; I’ll show you what to look for or how to choose the proper trader/pool in the later section of this article.

2) Investment Funds.

This is the second type of fund on Dexe Investment. Investment funds are used to invest in assets in the physical and digital worlds, such as real estate, sports, NFTs, and other things. These funds extend the application of DeXe investment beyond the cryptocurrency market and into the real world, where the possibility of high profits meets actual collateral value.

LP tokens

Here, the same technique used in standard funds can be successfully employed, enabling transparency, accountability, and convenience of investing. The trader, in this case, creates a pool and makes his initial deposit for investors to come in. The trader (or pool owner) can also create a risk proposal. The main distinction is that when an investor withdraws from the pool, their LP tokens are not burned unlike in standard funds but are retained and can be traded with other investors.

For example, if you own LP tokens in an investment fund on Dexe investment which focuses on a new startup in the manufacturing sector, and you want to cash out investment earlier, you can sell your share of the fund/pool to other investors, and the investment will continue.

Security Measures on investment funds

The security measures in standard funds, also apply here, such as:

A fund manager is required to have skin in the game at all times by depositing a portion of his personal assets and locking a percentage of them in the pool. As a result, he cannot simply wake up one day and rug-pool the money in the pool. Furthermore, this technique requires the fund manager to ensure that the asset he puts into the pool has significant profit potential.

Trading loss insurance against actual trade losses is also present here. If the fund’s value falls after you invested in it, you may be eligible for fund loss insurance if the Dexe DAO members decide that the loss of value is due to circumstances covered by the insurance.. These measures set Dexe Investment apart from other capital management platforms.

Risk proposals are also present in this context, although in a different way and with a different name, in that the fund’s creator is prohibited from adding any assets of his choosing without the fund’s participants’ permission through proposals.

Use Cases

Real World Assets (RWA) is an all-encompassing term for all tangible and intangible forms of investment and represents traditional financial assets that have been tokenized. These assets have a wide range of applications and can be used in any type of investment.

In the traditional finance sector, RWAs already support yield-generation activities. In the blockchain, they are, nevertheless, largely unexplored. Investment Funds on Dexe Investment are leading the charge in the DeFi market as a whole in reaching the goal of releasing the significant value associated with RWAs using smart contracts.

The following list includes several use cases where investment funds may be appropriate:

• Full or partial ownership of businesses, sports teams, etc.
• Tokenized master recordings of artists, etc.
• Real estate bonds, etc
• NFTs that represent physical items like real art, etc.
• Metals and commodities such as gold, silver, stocks, etc.

3) DAO Funds

DeXe is seeking to address the issue of inactive DAOs and lower the entry barrier caused by the technicalities involved in creating DAOs by aligning incentives and DAO formation and modification straightforward and simple.

DeXe Investment’s DAO funds enable anyone to quickly create a DAO and manage it through proposals with an on-chain voting system and a robust incentive structure for active participation.

How to create a DAO

The DeXe DAO fund disrupts the usual ways of creating a DAO by either forking an existing DAO or creating a new one from the start. Both methods have different layers of complexities and technical skills. In contrast, anybody can create a DAO fund in a few clicks right from their DeXe Investment dashboard. The steps are outlined below:

1. Create a DAO with one click by selecting “DAO funds” in the type of funds options. Fill in the details as required on the onboarding page.
2. Create a governance token: The governance token may be created along with the fund or, alternatively, any existing crypto token can be used.
3. Set the parameters of the DAO such as the quorum threshold, validator threshold, and other specifics of your DAO forum, proposal structure, etc.
4. Set the voting power of each member in the DAO: Because an NFT is a more valuable asset than a token, the fund creator can assign a different weight to each NFT’s voting power, for example, 1 NFT = the voting power of 1000 governing tokens. All of these can be adjusted to get the ideal balance for your DAO.
5. Set the incentives structure of the DAO fund: As the creator, you are provided with the tools to reward active members who effectively help the DAO grow and prosper. It’s up to you to set the incentives as you desire.

Features of Dexe DAO Funds

a) Simplicity: In addition to making DAOs simple to build, the creator has the resources to protect the DAO against bad actors. To stop malicious proposals from destroying the DAO, for instance, you as the creator can choose the validators to vote again on all proposals if you noticed any form of manipulation in the first vote.

b) Easy to manage validators: On Dexe DAO funds, it is simple to manage validators because they can be added or withdrawn if there is a need to do so. They can also hold governance NFTs, for example, or have unique validator tokens created.

c) Various in-built security features: DeXe DAO funds have other built-in tools for DAO creators to keep the DAO active and secure, like flexible voting, quorum, time, and other parameters to make sure minor votes get passed faster while big ones give everyone plenty of time to vote (and receive voting rewards).

d) Easy governance structure: A DAO fund can be governed with tokens or NFTs. As earlier stated, the DAO creator may create the governance token with the fund or use any existing crypto token for their governance. If NFTs are to be used, the fund creator can set each NFTs voting power to have different weights since NFTs are generally more valuable than tokens. For example, 1 NFT can be set to have the voting power of 1000 governing tokens. The DAO funds solve various problems rocking the current DAO systems in Defi; you can check DeXe medium page for more info.

How to select a suitable fund (pool) — A guide

In the last section, I promised to show you the details to watch out for when choosing a fund to invest in. Now, the time has come, so let’s get started. It can be difficult to find the right pool or trader with the strategies, trading tokens, performance history, etc., that suit your risk model as an investor.

Dexe Investment comes to the rescue by offering helpful stats and historical charts that show various facts about a fund. This produces the essential fund dashboard, allowing you to determine whether it is the best fund for you in a glimpse. Or delve further into the statistics. The following details are the most important ones to watch out for when choosing a fund:

1. Fund description: This provides a basic explanation of the nature of the fund, as well as a quick overview of its objectives so that investors can understand what they are getting into.
2. Fund Strategy: This is an explanation of the trading method and strategy that the trader will use to produce profits for you in the pool. So, instead of guessing how a fund intends to create money, simply look at the fund strategy.
3. Emission: In this statistics, the tokens utilized as LP tokens in a pool are listed along with the percentages that each token makes up for a single deposit. It provides a breakdown of how the token you deposited will be divided. For example, 10% ETH, 30% DEXE, and 60% BNB.
4. Date of creation: This displays the date the pool was created as well as the date of the most recent pool update. It displays a timeline of changes made by the pool creator in chronological order.
5. Type of fund: This shows the fund type — either standard, investment, or a DAO fund.
6. Minimum investment amount: By setting a minimum deposit amount, the trader limits the pool of potential investors to a particular group or category.
7. Fund manager: This section provides a complete overview of the fund manager’s (that is the trader or fund creator) profile. It enables you to research the manager to learn about their background and reputation.
8. Investor limit: This shows the maximum deposit per investor. It also sets a limit on how many investors can invest in the fund at once.
9. Performance fee: The fee the fund manager charges typically ranges from 20% to 70% of investors’ profit. See this article for additional information on traders’ profit from fees. This section displays the percentage of investor profits that the trader will receive.
10. Locked funds: As previously stated, the trader must have skin in the game by depositing part of his cash into the pool before investors can begin depositing. This section provides a visual representation of all the locked funds in the pool from the trader and the investors. This allows you to easily view how much funds have been deposited as well as examine the fund’s growth, which is a key metric in the pool.
11. Profit and Loss stats: Once you’ve determined how many investor spots are still available, the next obvious step is to determine how profitable the fund is currently. The profit is indicated in the pool’s base asset. This is the asset that the trader initially deposited in the pool. Profitability is measured differently by different people, which is why you can see it here in the fund manager’s base assets such as ETH, USD, and BTC.
12. Trading Stats: You can examine the average number of trades the fund executes each day, its daily profit, order sizes, maximum loss, and other helpful statistics to better understand the type of fund it is and to gain some insight into the fund manager’s thinking.

Conclusion

DeXe Investment is a ground-breaking project that will address several issues in the Web3 space. It has been designed to bring maximum profits to users — both traders and investors while still providing full security coverage to both parties. For newcomers and yield-earning fanatics who are willing to face the risk of participating in Defi social trading, the current Defi lacks a secure platform. Dexe investment has developed innovative tools and platforms to fill these gaps. For more details on other products that the Dexe network has developed, please visit their website.

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