DEXTF Protocol is an asset management protocol, it enables DeFi users to hold and trade multiple different crypto assets in one standard ERC20 token. You can draw similarities with the decentralized crypto index funds by PieDAO or Axia Protocol.
What is DEXTF Protocol?
DeFi users currently face a conundrum: there are so many innovative assets to hold! And nearly all of these projects have their liquidity mining programs. This means if you’re holding five different DeFi tokens, you will incur multiple transactions and higher gas fees – just to claim all your rewards. To the point, it could be more profitable for yield farming to park all your portfolio in one asset, but then what if that project collapses? DEXTF aims to solve these problems through XTF token funds.
What are XTF Token Funds?
An XTF token fund will represent a basket of assets, in the form of one highly liquid token. This means holders can gain more DeFi exposure at a faster rate, without giving up any ownership. Users can create their own funds using the Portfolio Manager. Currently, you can add up to 10 different assets into a fund. At the moment, the supported assets are tokens listed on Kyber Network. You can expect more tokens to be added as the project grows.
The idea is that the protocol will mint the fund into one token, enabling users to enjoy trading multiple DeFi assets without incurring hundreds of transaction fees. Furthermore, there are no lockups for asset diversification, meaning you can redeem the underlying tokens at any time. The whole process remains permission-less at all times and does not require any third party. Interestingly, the team states they believe decentralized oracles for price fees are dangerous. Therefore, DEXTF features no oracles and all price discovery will be done via arbitrageurs.
DEXTF token provides holders with voting power for protocol governance. It also intends to be an incentive mechanism for usage, with distribution happening via liquidity mining programs. The more DEXTF tokens in a user’s wallet, the higher the voting power they have during proposals. Such as voting to adjust system parameters like management fees or interest rate algorithms.
The rewards distribution of DEXTF is changing every month and there are many ways to get involved. Rewards go out to investors in the funds or portfolio managers who create the best performing funds. Additionally, there are daily rewards for providing liquidity to the DEXTF/ETH pair on Uniswap. No staking is required to get involved, the team takes daily snapshots to issue the rewards.
Looking to the future
DEXTF Protocol aims to facilitate investment for people who want to buy crypto assets but do not have the time to manage it. Hopefully, it will allow capital owners to find experts who can manage their portfolios. For more traditional finance users, this type of setup may be more attractive than depositing funds into automated smart contracts. It will definitely be interesting to watch the portfolio managers explain their investment strategy, and see how they stack up against each other.