How Does It Work?
Last updated
Last updated
Fume is a web application that operates on top of its proprietary on-chain protocol, which is built on EVM-compatible smart contracts. The platform currently supports and chains, with Arbitrum being the preferred choice due to its superior efficiency in terms of both cost and execution speed.
Investors can participate in an on-chain fund either by investing with stablecoins or through traditional fiat currencies. The platform provides a seamless way for investors to interact with on-chain funds, removing many of the barriers typically associated with blockchain-based investments.
For fund managers, Fume offers full flexibility in managing assets. The manager can connect any preferred custody solution to the on-chain fund to receive subscriptions and manage the underlying assets. This ensures that the funds are stored and managed securely, without Fume ever touching the money itself.
The smart contracts handle several critical functions:
Tokenized Fund Units: The protocol issues tokenized shares of the fund, representing the investor’s ownership (also referred to as fund units).
NAV Calculation: Fume’s smart contracts calculate the Net Asset Value (NAV) of the fund, ensuring transparency and traceability.
Equalization of Shares: It also equalizes shares across all investors, maintaining fair value distribution.
Fee Computation: Lastly, the protocol automates the computation and extraction of performance and management fees, ensuring an efficient and transparent process.
By automating these tasks through smart contracts, Fume eliminates manual errors, reduces costs, and creates a seamless experience for both fund managers and investors.