Problem: It is hard for regular people to get access to assets like hedge funds.
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Solution: DeFi hedge funds have the potential to revolutionize the accessibility of assets like hedge funds for the public. Traditional hedge funds have long been limited to accredited investors, who meet certain income or net worth requirements, effectively excluding the average individual investor. However, DeFi hedge funds operate on decentralized platforms, utilizing smart contracts and blockchain technology to provide a more inclusive and transparent investment environment. This eliminates the need for intermediaries and allows anyone with an internet connection and a digital wallet to participate in hedge fund investments.
DeFi hedge funds are like investment pools that use smart contracts to manage people's money. These funds invest in different things like cryptocurrencies, tokens, and other financial assets. The interesting part is that these funds operate on decentralized platforms, which means there is no central authority controlling them. Instead, they use blockchain technology to keep everything secure and transparent. The goal of DeFi hedge funds is to make money for the people who invest in them. They do this by using different strategies, like buying and selling assets at the right time or taking advantage of market trends. These funds give regular people like you and me a chance to invest in sophisticated strategies that were once only available to wealthy investors. One of the cool things about DeFi hedge funds is that they allow you to invest with smaller amounts of money compared to traditional hedge funds. They also remove some of the restrictions that traditional funds have, like needing a high net worth or specific qualifications. This means that more people can participate and potentially benefit from these investment opportunities.
DeFi funds is an expanding market, more hedge funds are investing into this space. According to the 4th Annual Global Crypto Hedge Fund Report 2022 by PricewaterhouseCoopers individual funds have grown by an average of 150% in 2021 and the percentage of crypto hedge funds with Assets under Management over US$20 Million increased in 2021 from 46% to 59%. To find out more you can click here, this would redirect you to the report.
We can create an e-wallet app that can be accessed through any device. The e-wallet will involve the user investing any amount into it. The user then earns interest on his e-wallet as the e-wallet automatically allocates the amount to the highest yielding DeFi protocols throughout Ethereum. The e-wallet will be dynamic and change the protocols to the highest performing ones therefore maximising returns to the investor.
Monetization: We can charge a 5% fee on the amount being withdrawn from the wallet.
Contributed By: Parthiv Chowdary Anne (Business intern at Billion Dollar Start-up Ideas)