DeFund is an ERC-20 asset fund who's value is represented by the Defund Share Token. Ethereum deposted into DeFund is automatically and evenly swapped into the underlying assets. At any time, assets can be withdrawn, or automatically swapped back into Ethereum. Along with such, DeFund provides it's own price oracle, supplied by Chainlink's off-chain data. As well as Flash Loans for any underlying assets.
DeFund makes use of two well established blockchain platforms. The Uniswap v2 Protocol enables the DeFund smart contract to automatically exchange between the underlying assets and Ethereum. In order to ensure the platform remains fair for all, a valid valuation of assets before and after purchase needs to be ensured. In order to achieve this we have integrated Chainlink's oracle solution to provide off-chain data for the valuation of underlying assets. This ensures that DeFund can accurately track the true value of deposited or withdrawn assets.
A fund such as this can be used to distribute value automatically among a specific genre of tokenized assets. For example, A fund consisting solely of DeFi ERC-20 assets would represent the whole market share of DeFi. By distributing assets among multiple tokens, the valuation of the Defund Share Token would be directly tied to the value of the underlying assets. This allows investors to invest in a range of assets quickly and efficiently.
A fund representing DeFi assets links the valuation of Defund Share Tokens with the market cap of DeFi. Currently, if a trader wanted to bet that DeFi as a whole was going to increase in market cap, they would need to purchase each DeFi platform's asset. Each purchase would be associated with it's own transaction Fees. DeFund solves this. With a DeFi fund, a trader would only need to trade DFT to expose their portfolio to the entire market cap of DeFi.
Defund Share Token, or DFT, was created to represent a wallet's share of the assets held within the Defund smart contract. By minting and burning tokens as the contract is interacted with, the DFT held will represent an equivalent portion of the underlying assets, from deposit to withdrawal.
DFT allows the value of the underlying assets to be transfered with a lower gas cost than transfering the held tokens themselves. The token follows the ERC-20 standard, allowing it to be easily traded and swapped.
DFT is minted and burned when interacting with the Defund smart contract. When Ethereum is deposited into Defund, the valuation of that purchase is minted in DFT and transfered to the depositor. When Ethereum or Tokens are withdrawn from the smart contract, the DFT sent to the contract is burned.
Flash Loans are an uncollateralized loan option in DeFi. Flash Loans enable developers to borrow instantly with no collateral needed. Provided the borrowed assets are returned within one transaction block, Flash Loans allow developers to use DeFund's underlying assets in a number of unique ways. If the liquidity is not returned, the whole transaction is reversed. This guarantees the safety of DeFund's underlying assets.
In order to remain competative. Flash Loans from DeFund have a progressive fee structure. This is to incentivize the adoption of Flash Loans. The fee is based on the percent of underlying assets you are borrowing. For example, if you borrow 20% of total value held by the Defund contract, you will need to pay a 0.075%. If this fee is not paid along with the borrowed assets within a single transaction block, the entire transaction will be reversed.