The philosophy of blockchain is intricately linked to individual freedom. The more interest an individual has for financial freedom, the more he is likely to be interested in cryptocurrencies. The Melon Protocol brings an even more innovative possibility for DeFi users, focused on cryptocurrency assets management interacting directly on Ethereum.
HOW DOES IT WORK?
The Melon Protocol is an open-source protocol for on-chain cryptocurrency-based asset management. It allows users to set up and manage an investment fund interacting directly on the Ethereum blockchain, with no middlemen of any sort involved.
Users are free to create funds cheaply and reliably. The idea behind the protocol is that anyone with a small amount of capital and the right crypto knowledge can substitute a large common investment institution or bank fund management.
The protocol works to lower the barriers for fund managers and investors, being referred by people behind the project as “asset management 3.0”.
Melon is particularly successful because it removes a lot of expenses associated with common investment funds like accounting, regulations, etc.
The platform allows fund managers to invest in 11 options of crypto assets, so far.
DIG INTO IT:
Fund managers are one the most benefited by it. They can use the protocol to create an investment fund, which is defined by several parameters (such as the number of open positions, tradable assets, fund’s risk profile, investors which can contribute to the fund, etc.).
Smart contracts within the ecosystem ensure that a fund manager cannot stray further from their initial strategy for the fund, as they are programmed directly into the contracts.
The protocol also has its own token, so-called MLN. It was built using an inflation model that allows it to fund more developments on the network.
MLN tokens also enable projects who want to build apps on the protocol to make funding requests straight to the governance council (which means they do not necessarily have to run an ICO).
If the council agrees, the project can get funding using the Melon inflation pool.
NATIVE TOKEN MAINTENANCE:
To make it easier for users to use MLN token, they are required to pay some fees.
It is required to pay asset management gas, as well as an Ethereum gas fee for some transactions within the network.
Asset management gas must be paid in ETH, to prevent friction and inconvenience for users. These ETH values are headed straight to the so-called Melon Engine, which buys MLN automatically through a decentralized exchange, then burns it.
It helps to align the MLN price along with the network usage and decreases the token’s usage as well.
REMARKABLE MONITORING TOOL:
The protocol has a user-friendly experience, by offering a complete statistic info monitoring tool available for free. All protocol’s statistics are tracked on the blockchain and can be seen by users at any time.
It allows users sort by the best performing funds. Information about every single fund is recorded, including yearly volatility, the number of trades, and all assets which are managed within the fund.
This is a highly valuable tool for users who want to find the best fund managers, all of this backed by reliable statistics and data recorded directly on the blockchain, with no risk of loss.
POWER TO THE PEOPLE:
Melon plays fair when it comes to transparency, having all transactions are recorded on the blockchain. This saves a lot of energy and prevents headaches among investors, that know their funds can be tracked anytime they want to check it.
The governance model is also another remarkable aspect of Melon. As soon as they deployed the protocol on the main net, developers began a process to hand it over to the community of token holders and the governance council. It created a self-sustaining system, as anyone can see.
The initial goal of the Melon team was to create a 100% decentralized autonomous network that could sustain itself without them. And it seems to be working out fine.
Developers still working to accomplish this, by maximizing its network effect, giving incentives to token holders as a prize for maintenance and network improvement.
Allowing users to set up and manage an investment fund by interacting directly with Ethereum blockchain, the Melon Protocol is a bran-new option for advanced users that want an open-source protocol for asset management.
With its native token and an interesting system to ensure its value, the platform also excels in other aspects, such as transparency, costs, accessibility, and governance (which is particularly good due to the model applied by the team).