Top Decentralized Asset Management Projects to Watch in 2021
In traditional finance, asset management boils down to how you manage and invest your money. More specifically, it refers to how someone else manages your money, whether that person labels themselves a broker, institutional investor, financial advisor, or otherwise.
An asset manager may provide advice gleaned from deep, firsthand knowledge of markets and various investment vehicles. They may also have access to a wider array of investment types because of certifications such as Certified Asset Management Practitioner (CAMP).
An asset manager generally considers their client’s risk tolerance and desires for their investments, and actively manages money depending on the changing state of the markets. For many, these are invaluable services.
The asset management industry oversaw $89 trillion at the end of 2019, showing the demand that clients of all stripes have for more knowledgeable, experienced financial professionals to invest their money savvily.
Those who trade in cryptocurrencies and other tokenized assets have also shown demand for asset management services. The landscape of blockchain-powered financial assets can be even more difficult for the layman to understand than traditional investments, and there is a clear need for managerial services.
The following projects are working to fill that void by providing various asset management services and protocols in ways that are fundamentally decentralized.
MyBit is a blockchain-powered investment marketplace that brings together investors, asset managers, and clients. MyBit is unique in that it allows for suppliers of revenue-generating tools like Bitcoin ATMs to provide those tools to customers, and it allows investors to fund the customer’s purchase of such tools. If funding is completed in the defined window, then the customer receives the ATM and the investors receive a percentage of the revenues that it creates. If funding falls short, all investments are returned to investors.
Asset managers oversee the supply of the good (in this case, a Bitcoin ATM) to the customer from MyBit’s partner suppliers.
dHEDGE is a decentralized asset management protocol integrated with Synthetix. Investors can connect with asset managers—“the world’s best investment managers”, per the dHEDGE site—through the Ethereum blockchain. The protocol and its connected platform markets transparency as a central benefit of decentralized asset management. Asset managers' “transparent track record(s)” are available for investors to see before they trust dHEDGE with their capital.
Users can see a manager’s performance on the dHEDGE platform leaderboard, and a feature called Performance Mining which rewards users of the platform that invest in profitable pools. Those who hold DHT tokens participate in governance of the protocol.
Betoken is a “crowd-powered” (i.e. decentralized) asset management protocol. It is structured as a fund, so you invest your cryptocurrency and a community of Betoken’s asset managers handles the rest. Betoken markets this simplicity as an advantage over other platforms where you can pick individual asset managers (perhaps based on their performance), though some may prefer the latter asset management format.
In light of that, the asset managers who perform the best have the most influence over Betoken investors’ assets, and are also rewarded based on the returns that they generate for investors.
DeFi Saver provides automated asset management services to crypto investors. Investors can regulate their position based on a predefined ratio. As the market moves and they become increasingly leveraged, DeFi Saver will make sales or purchases to maintain the ratio that the investor desires.
DeFi Saver integrates various wallets (Trezor, ImToken, Coinbase), exchanges (Kyber, 0x, Uniswap), and protocols (Maker, Aave, Compound, dXdy). Unlike other asset management platforms that connect human asset managers in a decentralized way, DeFi Saver represents fully-automated, decentralized asset management.
Furucombo does not connect users with asset managers. It does not offer automated asset management, either, like a user would receive from a platform like DeFi Saver. Furucombo is, however, a platform for users to manage their crypto assets - and presents a unique way of managing said assets.
Users can purchase and sell crypto from various exchanges, or add liquidity to decentralized exchanges to earn interest, through the Furucombo platform. It aims to make these experiences hyper-friendly to users by making every transaction into a series of “cubes”. Whether you’re swapping, selling, or buying tokens, or adding or withdrawing liquidity, Furucombo platform uniquely lets you manage your assets.
Gnosisis an asset management platform that caters specifically to those who want to manage crypto assets as a team. It also accommodates individual investors. Users of Gnosis can store, invest, and trade their crypto assets through the platform, as well as access a variety of DeFi Dapps.
Along with its asset management features, Gnosis caters to business-minded clientele by offering services like payroll management.
Multis is an asset management platform for those who want to put multiple parties in charge of crypto assets through multi-signature security. It is why Multis’ tagline is “crypto-first business banking”, as businesses who require or desire multiple parties overseeing collective crypto assets might manage their stake through a platform like Multis. Although Multis does not offer live human asset managers, the platform allows teams to manage their crypto by lending to various exchanges, making payments, and accessing crypto insurance products.
TokenSets offers users access to “crypto portfolios from the pros”. Users have access to various crypto investment portfolios (think indexes for crypto), as well as “sets” that are automatically regulated to manage risk based on market changes (Robo Sets). Social Trading Sets essentially allow others to manage your assets, just as a traditional asset manager would.
Users can also entrust their crypto assets to individual traders who operate through the TokenSets platform.
Yearn.finance is a suite of decentralized finance products. Among those products are the Vaults. Investors can put their capital into Vaults, and their capital is then invested via “unique strategies that are designed to maximize the yield of the deposited asset and minimize risk.” One of the appeals of Vaults is that by pooling investors’ assets, individuals do not have to bear the transaction costs of trading crypto individually.
DeFi Bench Asset Management Platforms
DeFiBench, an ecosystem of DeFi and non-fungible token (NFT) applications, has announced that it will be offering decentralized asset management platforms in 2021.
DeFi Bench Vaults will allow users to access “automated yield optimization” through investment in various DeFi protocols. Investors incur a .5% management fee and a 5% performance fee from the yields generated by the Vault investment.
The Gain platform is DeFiBench’s other asset management offering. Investors’ assets are invested in lending protocols based on which protocol is offering the best returns at the time. Users must pay a .5% management fee for the Gain service.
The variety of asset management services in the DeFi sector may be surprising to some considering the relative nascence of DeFi itself.
Those who want to outsource their asset management can have real, live humans manage their crypto through decentralized platforms. They can also invest in active portfolios similar to market indices or use automated tools that purchase or sell their positions based on market changes. Several decentralized platforms offer innovative ways for investors to manage crypto and non-crypto assets on their own.
With DeFi making the leap to become a multi-billion-dollar industry in 2020, there is more money locked in decentralized finance products than ever before. The financial migration to DeFi from traditional asset classes presents a great opportunity for decentralized asset management platforms to guide the investments of novice and experienced investors alike.
Which platforms and protocols will imprint or further emblazon their mark on the DeFi asset management space in 2021?