How do you know that his returns are real? How do you know Bernie will use the money you send him to buy only US equities, rather than Bolivian bonds, Iraqi real estate, or worse, a new car for his wife? What measures are in place to give you (the investor) security? And even if you decide that Bernie is legit, and isn’t going to go off piste with your money, how do you establish a fair valuation price to buy your first share in Bernie’s portfolio? Who provides you with that information? How do you know that Bernie’s fund really owns the underlying assets he says it does?
You don’t know him personally, but his sales team tell you that he’s been posting continuously good returns. Imagine it’s 2003 and you wanted to invest with Bernie in his US equity fund. What are asset management protocols and why are they important? We’ll then examine how other financial protocols are fast becoming automated and how Melon has the potential to become the platform that DeFi will operate on in the asset management 3.0 era. In this blog, we’ll take a look at what asset management protocols are and how blockchain technology can automate them. Automation of asset management protocols = the Melon solution. Since each intermediary is a potential point of failure, the current asset management industry is also clunky, inefficient and vulnerable to the behaviour of bad actors (think Bernard Madoff)īut the technology now exists to improve this infrastructure. As we will see below, the enforcement of such protocols involves considerable administration costs which impose significant barriers to entry in the industry. These protocols involve countless financial intermediaries which, together, play a crucial part in ensuring that investors in funds and fund managers can trust one another. And there are protocols in the asset management industry.
#ANTIMATTER PEPE HOW TO#
There are protocols for getting married (where to register, how to ensure it is legally recognized), for driving on the road (left side or right?), for finding a table at a restaurant (show up or book in advance) etc etc. Protocols are simply standardized operating procedures to get tasks done quickly and efficiently. The techies among you might already be raising an eyebrow here: “ Existing asset management protocols? Off-chain? Who has off-chain protocols?” What we are focused on is automating the way existing asset management protocols are enforced. We aren’t trying to disrupt asset management. When we’re making the case for Melon we’re often asked about how we intend to disrupt asset management.