🏗️Fund Setup

Setting up your on-chain fund in Fume is straightforward. Follow the steps below to configure your fund’s essential details, fees, wallets, and settings.

1. General Information

The first step is to define the core details of your fund:

• Fund Name: This is the name of your fund.

• Ticker: The ticker is the symbol associated with your tokenized fund units.

• Base Currency: Select the currency that will be used for accounting purposes.

• Blockchain Network: Choose the blockchain network on which your on-chain fund will be deployed. You can select between Ethereum and Arbitrum. For greater efficiency (lower costs and faster transactions), we suggest Arbitrum.

• Initial NAV: Set the initial Net Asset Value (NAV) of the fund. This value is used to issue the first shares to early investors. This is commonly set to 100.00.

2. Fees

Now, define the fee structure of the fund. These fees will apply to investor transactions:

• Management Fee: Typically a percentage of the fund’s total value.

• Performance Fee: A percentage of profits (above the high-water mark).

• Entry Fee: This is the fee applied to new subscriptions into the fund.

• Exit Fee: This is the fee applied when investors redeem their shares.

• Lockup Period: The lockup period defines how long investors must wait before they can redeem their shares.

• NAV Frequency: Define how frequently the NAV should be calculated and updated.

Note: The entry and exit fees, as well as the lockup period, can be adjusted later on and even customized on a per-investor basis.

3. Wallets

Next, you need to configure three wallets for your fund:

• Manager Wallet: This is the wallet that the fund manager uses to control the on-chain fund. The manager can whitelist investors, interact with the fund, move liquidity, and manage fee payments. For example, you can use a MetaMask wallet or a more secure solution such as a multisig like SAFE or Fireblocks.

• Fund Wallet: This is the wallet where the liquidity for the fund is stored. The fund manager can connect any custody solution here, such as a multisig, MPC, or even a centralized exchange. This wallet holds the underlying assets of the fund.

• Fee Collection Wallet: This is where the management, performance, entry, and exit fees are collected. In some cases, the fund manager might use the same wallet for both fund management and fee collection.

Note: These wallets can be updated later on.

Example of wallets for an On-chain Fund

4. Transparency

Finally, you can configure the transparency settings for your fund. Decide how much information you want to make visible to investors. You can choose to provide full transparency or limit access to specific metrics. You may allow investors to see:

• Key Metrics: NAV, performance, fees.

• Flows: Inflows and outflows of capital.

• Shareholder Registry: Information about other investors in the fund.

You can fully customize these settings to match your preferences. You may decide not to show certain details, like the underlying assets or specific flows, while still making other information available.