One-click purchase of 'fund manager'? Decoding the nuclear weapon of Lorenzo Protocol: On-Chain Traded Funds (OTF)
Today, we will delve into the most disruptive product of the Lorenzo Protocol—OTF (On-Chain Traded Funds). You can think of it as the 'on-chain version' of an ETF or hedge fund, but more transparent and open.
Imagine a top-tier quantitative team developing a neutral strategy for the crypto market. In the traditional world, you need to be a high-net-worth individual to participate. However, on Lorenzo, this strategy can be created as an OTF vault. The assets contributed by users, such as USDT, will be proportionally exchanged for tokens representing shares of the OTF. Your token balance is your proof of equity in this 'fund'.
The innovation of OTF lies in its 'on-chain-off-chain' collaborative architecture:
1. On-Chain: Fundraising, tokenization of shares, and final profit settlement are all publicly verifiable on-chain, eliminating the opacity of traditional funds.
2. Off-Chain: Complex strategy signal generation and trade execution are completed by professional management contracts or teams off-chain, ensuring the efficiency and flexibility of the strategy.
This means that you do not need to trust the personal commitments of fund managers; you only need to trust the verified and publicly available logic of smart contracts. The vaults that Lorenzo has launched cover various types like volatility strategies and structured returns, catering to different risk preferences from conservative to aggressive.
For $BANK holders, the prosperity of OTF is crucial. A portion of the revenue generated by the protocol will be used to buy back and destroy $BANK or distribute to veBANK stakers. Therefore, OTF is not just a product, but the core engine driving the entire protocol's value flywheel.
What type of on-chain strategy fund are you most interested in? Is it the conservative arbitrage strategy or the more flexible volatility capture? Let's talk about your choices!
