dFund is a new project on Polkadot’s blockchain that aims to bring decentralized hedge funds.
The project allows users to invest into different funds and have expert managers make profit for investors.
In addition to that, it also allows users to offer loans and dictate their own terms.
dFund is a new DeFi protocol that not only offers users to offer and take loans, but also offers decentralized hedge funds that are ranked based on performance.
The DeFi sector emerged as a revolutionary combination of financial solutions for people who wish to use cryptocurrency to take their finances into their own hands. With DeFi, the digital currency sector becomes more than just a speculative tool. DeFi allows users to earn with as little risk as possible, with most of these earnings being passive income.
More than that, it completely changes the way we deal with finance. Up until now, those in poverty-stricken areas had no way of taking control over their financial future, due to the lack of interest from the banks. If they cannot profit, they don’t bother offering services, and with over 2 billion unbanked people in the world (according to estimates), this represents a huge untapped market for DeFi.
Best of all, these people can benefit from the DeFi sector a lot more than they ever could from dealing with traditional banks and financial institutions. One example is the ease of taking out loans, which is something that a new project called dFund specializes in.
What is dFund?
dFund is a brand-new DeFi platform that doesn’t only make decentralized loans and hedge funds possible to access, but also makes them extremely approachable. The project operates in the Polkadot ecosystem, and its network consists of a number of different DAO modules, all of which are acting as decentralized hedge funds and investment funds, popularly called dFunds.
And that’s what this project is really all about — allowing investors to invest and pool money into the dFunds, which then is managed by a dFund account manager. The manager would invest it for profit, similarly to how traditional hedge funds work. dFunds can also have their own unique terms and conditions, like the success fee that they charge once profits are made, or their internal organization.
Each dFund will be rated in accordance with its performance, and then compared against others and ranked accordingly. That way, users will easily be able to identify dFunds with the highest returns. They will be able to see the percentage of the returns for each dFund, and make an informed decision when it comes to which one to invest in.
Naturally, the top-performing dFunds will also charge the highest fees, as they all but guarantee high rewards and low risk. Since everything is transparent and based on smart contracts, it will be a simple matter to audit and verify returns and performance, as all of this information will be stored on the blockchain, and instantly accessible to everyone at any time.
As mentioned, the project will also allow users to take out loans in exchange for a collateral, with the collateral requirements being selected by the lender. Different lenders will request different requirements, so users will also have the opportunity here to browse different offers and find the most approachable ones.
Lenders also choose the duration of the loan, interest rates, and other details. However, borrowers will also be rated and ranked themselves, through the use of a credit score system. That way, reliable borrowers will have a higher credit score, and will be able to access lower interest rates, as they will be considered low-risk.