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Melon Protocol Removes Third-Part In Fund Management Using Blockchain

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The Blockchain will continue to blow the minds of those who care to observe the innovation it is bringing to the world today. It seems the technology is permeating all sectors of human endeavour.

Take a look at Finance, for instance, its first application and how it has gone beyond digital currencies to the tokenization of traditional assets and investments. There is no doubt many things will move to Blockchain looking at how financial instruments like stocks, venture capital, fund management, borrowing, lending and many others are going digital on the DLT.

Several products are coming out of the system, especially from the DeFi space. We stand at a cross-road where the legacy trust system is being demolished to pave the way for a new robust trustless mechanism that offers total transparency and accountability.

Welcome Melon Protocol

Melon Protocol is an infrastructure for the new and innovative Management 3.0 paradigm. It is an ERC based protocol targeted at decentralized on-chain asset administration. The protocol is specifically built for individuals and firms to manage their resources as well as the wealth of others in a secured setting. According to the website of the project, it permits anyone to set up, operate and invest in customized on-chain investment vehicles.

Melon was born out of the desire to remove third-parties in the financial market, which ruin competency and efficiency. The contemporary fund management is set-up in a manner saddled with difficulties.  It is quite a complex entanglement of intermediaries needed for compliance, auditing, management, supervision and oversights. The situation indicates that operation cost is notably expensive, while the administration is ineffective and short of transparency. 

Melon is executing a more efficient way to assist investment administrators and investors in resolving the prevailing conditions. Therefore, their mission is to overhaul the entire industry to bring in a new breath of air. 

Melon’s Solution

This project is leveraging the Blockchain to give fund management a facelift, and a new direction. It is an open-source protocol which empowers people to set up and manage a combined asset vehicle on-chain, at a far lower cost than that of the traditional funds. 

Melon automates the unwieldy back office and intermediary roles entailed in traditional Finance using smart contracts. With Melon, you can set-up a fund at a cost less than $50, and more importantly, it takes a few minutes without barriers to entry.

Melon expects fund managers to determine the essential rules and parameters of the fund. Then it is deployed on the Blockchain and driven by smart contracts with no need for fund administrators. All transactions are recorded transparently and immutably on the Blockchain – no more need for complicated auditing.

The refreshing part is that it is non-custodial, and all assets remain in the custody of investors and can be redeemed at any time.  Hence, data about fund performance is on-chain, making it transparent, allowing investors and managers to analyze fund allocation and review. Melon Protocol has close to the instant transaction, and unlike the traditional sector, which can take some days, do not require clearing and settlement services.

Regulatory Framework

Melon is a co-founder of the Multichain Asset Managers Association, popularly known as MAMA. The association which has over 60 members advancing the interests of on-chain asset management and associated Decentralized Finance technologies.

MAMA upholds that most of the investor protections that governments and regulators concentrate on today are replicable in spontaneous Smart-Contract code via encoded rule-sets. It generally refers to the process as Technology Regulated and Operated Finance. 

Typical examples of this include p2p trading, pre-trade rules in Smart Contracts such as investor and asset whitelisting, maximum price tolerance mechanisms. It helps to prevent trading at wrong prices on decentralized exchanges, encoded risk management metrics to prevent unsuitable risks being taken among others.

Join Melon Community

Melon Protocol has a vibrant community across some social media networks. Kindly join some of them to engage the team and members to ask anything on your mind.

Here are the platforms:

You can also check the source code on Github.

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