How Avareum Works?

Interoperability

Avareum is an asset management platform with cross-chain interoperability.

We are developing solutions that enable cross-chain interoperability between different public chains. Our simple yet robust design of architecture is aimed to support the future of the new chain integration and protocols composability. Fund managers can seamlessly focus on investment strategies without worrying about the complexity of the underlying communication mechanisms and asset transfers.

The direct composability with various protocols across DeFi stack such as lending, DEX, synthetics on different blockchains expands the asset universe from primitives or plain vanilla tokens to complex derivatives products, allowing the managers to take full advantage of all investment opportunities existing in both traditional and unique to DeFi with the goal of enhancing portfolio performance.

Avareum is also aimed to service customers on various blockchains. In the initial launch plan, Avareum will start servicing investors on Solana to enjoy the benefits of faster execution and lower transaction costs. Once Avareum is fully proved and ready to scale, we will offer our service to investors on the Ethereum chain, which stands the test of time for several years for its most mature financial ecosystem and currently active developer community. In the future, we also hope to expand our service on other well-recognized blockchains, which include but are not limited to, Binance Smart chain, Terra chain, to open access to a wider range of investors.

Efficiency

By utilizing decentralized technology, Avaruem simply standardizes operating procedures to be more efficient.

The current system of traditional fund operation is complicated, expensive, and slow. The cost of all financial-related intermediaries to satisfy the required regulations is then passed on to investors. Our solution is to implement on-chain fund management which does not require financial intermediaries. Instead, they are replaced with smart contracts. We design the architecture of fund operation in the way that the fund can perform functions across the entire fund management value chain such as custodian, fund administration, and back-office operations to address the regulatory concerns. We are simply automating the existing asset management protocols with code, comprising of the subscription mechanism, redemption mechanism, fund token representation, fee calculation, etc. As a result, our protocol operates in a more efficient and less costly way.

In terms of the fee management system, all the fees in our protocol are charged implicitly via price dilution. Not only does this enable fund managers to utilize the full amount of funds whenever desired, but also reduces the transaction costs involved in the fee collection process. This allows more efficient use of funds and thus enhances the portfolio performance, particularly when there is no regulatory constraint on fund reservation and operations.

Transparency

By replacing industry middlemen function with smart contracts, and with our operating mechanism, it enables us to operate in a more transparent way.

Decentralized technologies provide a range of benefits related to transparency, for example, all transactions and data related to the fund performance are recorded transparently and immutably. By just directly accessing an operating node or using a blockchain explorer, any transaction, even occurring live, is visible to and can be seen by the public. Moreover, once entering the blockchain, the data becomes irreversible. This ultimately paves the way for real-time accounting, auditing, and reporting.

Smart contracts can improve transparency further by imposing preventive measures on middlemen functions In our protocol design, fund managers can perform a limited number of actions that are relevant to only investment decisions. The fund is unable to be arbitrarily moved, thus adding another layer of security. Moreover, some parameters of the fund, such as investible assets, whitelisting addresses, are enforced by smart contracts, eliminating the need for fund administrators.