Project review: DeXe Investment

DeXe Investment is an interesting platform that aims to tackle two big shortcomings in DeFi at once, specifically those of investment funds and DAOs. With investment funds, trader/managers and investors are both unhappy with the limitations placed on them by the various trading platforms and by a general lack of security that leads to too many investors losing everything. In the DAO realm, what was created as a better way for big groups to organize ended up being another way for a small group to run a company with others either tuned out or gaming the system for rewards. DeXe Investment wants to be the tool that will finally solve both problems.

DeXe Investment Funds

For traders

The old system of creating investment funds places a lot of limitations and verifications on traders without giving them much in return. So DeXe decided to let any trader create and run a fund, set own reward of up to 70% of investor profit, and trade whichever assets they want to (tokens, NFTs, even real world assets like Real Estate or startup equity — anything), as long as they put their own money in the game and as long as investors opt in. Fund managers can decide how much capital they take in, invite others to co-run it, make proposals to get opt-in for new trading strategies, and much more. Freedom to prove your worth and fair rewards for it is what DeXe is trying to give to trader/managers.

For investors

Trader stats are transparent and constantly updated, so investors can easily decide which strategy(ies) to opt into. Security is ensured by never giving traders direct access to investor funds (instead, DeXe uses smart contracts). Additional security comes from requiring traders to put in more of their own money if they want more investor money. The last and perhaps most ingenious layer of security that DeXe came up with is the insurance against Black Swan kinds of fund losses (determined by the DeXe DAO). The insurance is free as long as the investor stakes (in the $DEXE token) up to 10% of their investment deposit (10% = 100% deposit insurance).

Creating a fund

The old way of creating a fund required many document and regulator approvals, a long long wait, and access given only to “qualified” investors. DeXe replaces all that with a few clicks and an “everybody is welcome” policy.

Investment Fund use cases

We usually think of funds as investing in stocks or ForEx, or lately crypto. But in a decentralized world, anything can be investable. Blockchain technology makes recording ownership and transfer of ownership so easy and transparent to all that any digital or physical asset can become part of an investment strategy. Old collectible baseball cards, the career of a promising athlete, your favorite band’s master records. As long as there is a clear system that protects capital and gives managers the freedom to pursue their strategies.

DeXe Trader Marketplace

This one is pretty self-explanatory. All those traders on DeXe Investment can be sorted and ranked on a number of categories for investors to find the manager and strategy that fits their goals. Stats are transparent, updated, and detailed. Some stat categories DeXe is offering are:

• Fund volume of capital investment
• Investing requirements
• Type of fund
• LP token price history chart
• % of profitable trades
• PnL of all the positions of the fund
• Average profitability in the past 24 hours
• And many more

At the end of the day, an asset management platform needs to easily connect investors with trader/managers, and the DeXe Trader Marketplace seems to be doing just that.

DeXe DAO Funds

As anyone who has visited the Deep DAO site knows, most DAOs have few members and even fewer active, few proposals, and barely any funds in their treasury. This is not why the DAOs were invented.

DeXe is trying to solve the challenge of DAOs being inactive by aligning incentives and making creating (and modifying) a DAO onchain easy. DAO creation takes a few clicks in DAO Funds. The creator can choose any token for governance or create one right there. He can even use NFTs for governance (or both NFTs and tokens, with different voting power assigned to reward more dedicated members).

Member advantages

It’s unfair that in many DAOs and traditional companies, early investors or employees get a big cut of future profits while not even being involved anymore. To fix that, DeXe DAO Funds is trying to give DAOs the tools to reward active members who effectively help the DAO grow and prosper.

To reward effective activity, the DAO can reward members for making proposals, voting, and even executing a passed proposal into “law.” Members can vote on rewards, initiatives, and modifications to the DAO, with everything happening onchain. DeXe’s own DAO demonstrated that when the community proposed and passed initiatives such as the Ambassador Program and sponsorship of a Binance event (DeXe is a frequent partner of Binance). Both those proposals included treasury spend, all controlled by the DAO community.

Creator advantages

Besides making the DAO easy to create, the creator has the tools to protect the DAO from malicious actors. For example, validators can be appointed who will have a second round of voting on proposals to prevent malicious ones from destroying the DAO. Validators can be added/removed and can be governance NFT holders, for example, or have special validator tokens issued — which makes governance easy.

DeXe built-in other tools for DAO creators to keep the DAO active and secure, like flexible voting, quorum, time, and other parameters to make sure minor votes get passed faster while big ones give everyone plenty of time to vote (and receive voting rewards).

DAO Funds use cases

Literally any group that wants to self-organize would benefit from being a DAO. Want to jointly buy a Picasso? Form a DAO. Want to better organize your local school parent organization? Form a DAO. Hockey team needs to better plan their spending and sponsorships? Form a DAO. Because DAO is transparent, secure, and flexible in distributing voting power and rewards, it is a good way to motivate members to actively and effectively participate for their own good and the good of the organization. Looks like DeXe is trying to tap into that need by making it easy.

Conclusion

In both the investment fund and DAO parts, DeXe Investment really does look solid. Its approach is innovative (with insurance, non-custodialism, validators, NFT usage, etc.) and could really set it apart from the rest of the field. Especially with the current bear market in crypto and all the scandals about crypto companies misusing depositor funds (and ending up in bankruptcy), DeXe’s non-custodial, security-first, power-to-the-people approach may actually be the solution DeFi needs. The platform is not yet officially released, so let’s wait and see.

Stay tuned!

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