OTFs: when funds cease to be institutions and become code
For decades, professional portfolio management was encapsulated in closed vehicles: funds, ETFs, structured products. Accessing them involved intermediaries, schedules, friction, and, above all, opacity.
The On-Chain Traded Funds (OTFs) of Lorenzo Protocol stem from a different idea: if a strategy can be defined with clear rules, it can also be executed and audited like software.
An OTF is not simply a "tokenized" fund. It is a programmable structure that groups strategies, calculates its value in real time (NAV), and allows on-chain entries and exits without relying on manual processes. Logic replaces bureaucracy.
The difference compared to a traditional ETF is not just technological, but operational. Where there were once subscription windows, opaque custodians, and deferred reports, here there are smart contracts, continuous traceability, and explicit rules.
This enables something new in DeFi: asset management with institutional discipline but with global accessibility. The user does not interact with isolated strategies but with a portfolio designed and governed as a system.
In this framework, the token $BANK acts as a governance mechanism over what funds exist, how they are structured, and under what rules they operate.
@Lorenzo Protocol does not propose "faster funds", but a deeper question: what happens when financial products are designed as verifiable software?
Image: Lorenzo Protocol on X
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This publication should not be considered financial advice. Always conduct your own research and make informed decisions when investing in cryptocurrencies.
