OTFs: When Funds Transition from Institutions to Code
For decades, professional portfolio management has been confined within closed structures: investment funds, ETFs, and structured financial products. Accessing them required intermediaries, specific times, operational friction, and most importantly: a significant amount of opacity.
On-Chain Traded Funds (OTFs) from Lorenzo Protocol stem from a different idea: if the strategy can be defined with clear rules, it can also be executed and audited as software.
The OTF is not just a “coded” fund. It is a programmable structure that aggregates multiple strategies, calculates net asset value (NAV) in real-time, and allows on-chain entry and exit without relying on manual processes. Logic replaces bureaucracy.
The difference from traditional ETFs is not just technical, but operational as well. Instead of subscription windows, opaque custody, and deferred reporting; here we find smart contracts, continuous tracking, and explicit rules.
This opens a new door in DeFi: asset management with institutional discipline and global accessibility. The user does not deal with individual strategies, but with a portfolio designed and managed as an integrated system.
Within this framework, token $BANK serves as a governance mechanism that determines which funds are created, how they are built, and under what rules they operate.
@Lorenzo Protocol o Protocol does not propose “faster funds,” but raises a deeper question: what happens when financial products are designed as verifiable software?
Image: Lorenzo Protocol on X
Disclaimer: This publication is not investment advice. Always do your own research and make informed investment decisions when investing in cryptocurrencies.#altcoins