Fund Platform is an interesting new crypto project that is building a full infrastructure for a crypto-investing platform. An interesting aspect of the Fund Platform is that instead of going the traditional route of having a token on Ethereum (ETH), Fund Platform is instead building on NEM.
The Choice of Building on NEM
NEM is an interesting choice of blockchain for Fund Platform. Although it isn’t Turing Complete for smart contracts, NEM is well suited to handle crypto-assets on the blockchain, borrowing that legacy from the first pure proof of stake chain, NXT. Also, NEM is far older than Ethereum and has been going strong after all these years (NEM was created in 2014). Therefore, it has shown to be resilient to change after all these years, and the NEM blockchain continues to grow by leaps and bounds. Another big advantage of NEM over Ethereum is that NEM is a far more scalable blockchain than Ethereum is right now.
NEM uses a Proof of Importance protocol for blockchain consensus, as opposed to Ethereum’s Proof of Work (PoW). This makes NEM more scalable than Ethereum and able to handle a higher number of transactions per second.
Some might question this choice – shouldn’t all new projects try and build on Ethereum to maximize network effects? The answer is no. There are multiple possible winners in the blockchain space, and we would much rather see projects that are resilient rather than risk everyone on one blockchain Ethereum.
Also, Ethereum is an overkill for simple tokens. Simple tokens don’t need complex Turing complete contracts. Instead, NEM offers exactly what a token needs – its ability to track tokens through the blockchain and for the assets to represent something. Several new blockchains like Waves and Stratis also provide this type of functionality. However, NEM is older than them all and has a better throughput.
Also, since there are scores of ICOs on Ethereum going on every single day, presumably Fund Platform can stand out as an ICO for the NEM community members, who don’t see ICOs that often.
About Fund Platform
Now that we have the choice of blockchain for the token of Fund Platform out of the way, let’s discuss the platform itself. Fund Platform is created as a crypto investment platform. It brings together crypto investors with fund managers, while cutting out the unnecessary fluff in the middle.
Here’s the big twist though – unlike traditional fund management, the fund managers cannot run away with your funds. This is a fundamental problem in crypto investment community where you don’t know if you can trust the person who you give control over the money. Even more than trust, it is a matter of accident as well – for example the fund manager may be very trusted, but due to a mistake, might get hacked and lose all the funds. This isn’t the first time such a thing would happen.
Instead, what Fund Platform does is make custody of funds simple and on the platform itself. This means the responsibility of security of funds falls on the Fund Platform developers instead of every single asset manager on the platform. This is important because asset managers cannot be known to be the best in the world on security, after all.
The fund platform itself is tokenized on the NEM blockchain, so you can quickly and easily go in and out of a fund that is trading on the Fund Platform.
Fund Platform makes it really easy to start your own virtual crypto hedge fund, while reducing custody risk at the same time. It is a win-win for the asset managers and end crypto investors really.
There’s a native token for Fund Platform called the FUND token. This is the token of the platform, used a currency to pay for everything from legal expenses to paid API access.
Photo Credit: Stef