FAQ

1. What is a Crypto Index Fund and How Does it Work?

A Crypto Index Fund pools investments to purchase a diversified portfolio of cryptocurrencies, similar to traditional index funds in the stock market. For example, our flagship fund Crypto100 focuses on the top 100 tokens by market cap, providing broad exposure and mitigating the risk associated with individual crypto investments.

It's akin to the S&P 500 but for the cryptocurrency market, offering a comprehensive way to participate in the growth of the entire crypto sector.

2. Why Invest in a Crypto Index Fund Instead of Individual Tokens?

Investing in a Crypto Index Fund offers diversified exposure to the cryptocurrency market, reducing the volatility and risk compared to investing in individual tokens. It's an efficient way to capture the growth of the entire sector without needing to predict which single token will perform best.

3. How Has the Fund Performed Compared to Investing in BTC or ETH Alone?

Our Crypto Index Fund has seen a remarkable performance, up 355%, significantly outperforming investments in BTC or ETH alone. This showcases the advantage of diversified investments in capturing broader market gains.

4. Can Beginners in Cryptocurrency Investing Join the Fund?

Absolutely! Our fund is designed to be accessible to investors of all levels, including beginners. We provide an easy entry point into cryptocurrency investing, with the added benefits of diversification and professional management.

5. What Measures Do You Take to Ensure the Security of the Investments?

As a decentralized finance (DeFi) platform, we don't take custody of your funds. All transactions occur on the blockchain, ensuring transparency and allowing you to check proof of reserves at any time. Furthermore, we use multiple liquidity providers to minimize counterparty risk, enhancing the security and integrity of your investments in the fund.

These adjusted answers should provide clarity on how your fund operates within the crypto market and the security measures that protect investor interests, especially emphasizing the decentralized and transparent nature of your fund's operations.

6. What is Decentralized Finance? (DeFi)

Decentralized Finance, often shorted to just DeFi, refers to the emerging infrastructure of decentralized financial applications on cryptocurrency.

Being decentralized, there is no middleman in your transactions. All are dealt with by smart contracts on the blockchain. DeFi allows users to perform existing financial applications on crypto without using centralized exchanges. This gives greater freedom to the users but also makes them fully responsible for their assets.

Pros of Decentralized Finance

1. Decentralized

As per its name, DeFi is decentralized. This allows users to freely trade assets without going thru a third party. This is advantageous to users as it makes it open, easier to use, and generally anonymous too. See the next point for more info.

2. Open and easier to use

One of the biggest advantages DeFi has is the ease of use and generally lower barrier of entry. Both CeFi and DeFi have similar financial applications. However, most CeFi will require KYC to even use, and those without have usage limits. DeFi, on the other hand, does not have these limitations. DeFi will allow anyone to use its services, as long as they understand it of course.

This allows anyone to use such platforms for whatever use they want. Loans are quite popular on DeFi. In getting one, there is no need to undergo background checks in DeFi. To the smart contract’s eyes, everyone is equal. As long as you have the collateral, the loan is yours.

3. Transparent

DeFi is built around smart contracts. It is not surprising that it is transparent, and much more so than CeFi. The blockchain is available to anyone; you can see the code itself in smart contracts. There is no need to worry about your funds as the blockchain is immutable.

Cons of Decentralized Finance

1. Risk

• Technological Risk — that is, malfunctioning or malicious code could have catastrophic effects on the protocol, such as the $90m glitch suffered by Compound after an upgrade.
• Asset Risk — that is, since the cryptocurrencies used as collateral for loans are highly volatile in value, undue price movements would cause the mass liquidations of millions of users. On the other hand, loans from centralized banks remain relatively stable, and the only method of liquidation is defaulting.

• Product Risk — that is, since there is no regulation to protect investors from failed projects and that the value of a DeFi protocol is often determined based on its APY, it is commonplace to see DeFi protocols enticing users with unrealistic APYs and collapsing once they have a significant number of users. This entails the loss of investor funds, and is a similar situation to the crash LUNA underwent a few months ago. The IMF also warns of the product risk in decentralised finance.

1. Lack of regulation

• Like most cryptocurrency-based technologies, DeFi protocols lack comprehensive regulation. This allows doomed (or untruthful) systems like LUNA to thrive while investors are robbed of the money placed in DeFi protocols.

• Regulation is also a crucial factor in letting investors know that a protocol is compliant with legislation, so a lack of regulation inhibits the potential of DeFi, especially to non-holders.