Investment Fund Management — a Solution from RSquad
Automatic and quick distribution of investors’ tokens, full transparency of transactions and user-friendly interfaces designed both for the administrator and contributors. Let’s take a closer look at the new service from the RSquad team.
As practice shows, most investors try to exchange their tokens immediately upon receiving them at tokensales. Both ordinary investors and the venture capital fund that mediates for them inevitably face a number of problems.
Here is how Roman Nguyen, CTO of RSquad, describes the first one:
– Let’s say we have 100 people who invested in our fund, and supposing we have a TGE at 7 p.m. The first problem is that when a project transfers its tokens to the fund, the fund starts distributing that money. If it does this manually rather than by some Batch transaction, the first investor receives tokens at 19:01 and the last investor receives tokens at 20:30. On average, it takes a minute per transaction. So, it turns out that the first investor sold his/her tokens at a high price and the last investor sold theirs for a song. This raises a big question: who exactly should be the first investor and who should be the last one? The one who invested earlier, or the one who invested more? Or should the order be random?
Developments have already appeared on the market to conduct similar transactions by means of Batch transactions. However, even these developments are far from being automated, as in most solutions, the operator has to fill in lists of addresses, names of tokens and corresponding amounts of money manually, and sign the transaction to make it happen.
The automation of such procedures is a long overdue need. It is especially pressing when the number of users and payment amounts increase.
The second problem that investors face in established practices is the insufficient transparency of procedures for investors.
– For example, there is an investor who wants to invest in a project with the help of a fund. He/she asks the fund to invest, say, a hundred dollars. He/she says, “Please transfer the $115 (the result of the investment) to my personal wallet”. Where exactly is the money to be transferred? Will there be no cheating? Why is the resulting sum exactly 115 dollars? What fee will the fund require? How does the accounting function? The answers to all these questions are usually written in Excel in manual mode. In case, say, only 20 investors whose sums are up to 10,000 dollars turned to the fund, it’s not so bad. However, as soon as the investment sums exceed this limit, and the number of investors is more than a hundred, it becomes a big problem for accounting.
The RSquad team offers its solution for automating an investment fund activity. It is a system of smart contracts compatible with EVM blockchains as the most common phenomenon on the market, which has two levels of interface: operating (for the fund) and user (for investors).
Tasks that the product carries out
The product put forward by RSquad is the most transparent system for the collection, accounting and distribution of funds, which automates the operations of the investment fund.
– After receiving the project tokens, the administrator already has a ready-made list, and they will not make a mistake while distributing and calculating the percentages. For example, the fund received 10,000 tokens, and that is 10 percent of the total amount. Thanks to our solution, these tokens will be distributed absolutely accurately, according to the shares that investors have contributed. This is what automation is all about. Moreover, distribution is simultaneous and virtually instantaneous. Most importantly, this system is based on smart contracts. This guarantees that the fund will fulfill its obligations, since these are completely transparent procedures.
The solution from RSquad provides the following opportunities:
For the investor:
- The interface of the system enables you to see all the projects in which the investor takes part, with the sums being indicated, e.g. how much was invested and where, fees, the number of tokens received and the number of those left to receive, etc.
This provides the following advantages:
- Equal access to tokens. All users receive project tokens almost simultaneously and can use them at their discretion without delay.
- A convenient tool for tracking and managing one’s investments.
- Transparency of smart contract system processes.
For the system administrator:
- Automation of processes for placing projects, adding users (that is investors) to these projects;
- Convenient collection and distribution of tokens.
Precise automated allocation of tokens to users — according to the shares contributed by investors.
- Fast and simultaneous distribution of tokens to all investors. The full cycle from receiving project tokens to sending them to users takes 4 minutes.
- Demonstration of the fund’s commitment through the transparency of the system’s processes based on smart contracts.
Benefits for administration:
1. A clear accounting system that provides all the necessary data to the administrator and the user (investor).
2. Precise automated allocation of tokens to users — according to the shares contributed by investors.
3. Quick and simultaneous distribution of tokens to all investors. The full cycle from receiving project tokens to sending them to users takes 4 minutes.
4. Demonstration of the fund fulfilling its obligations through the transparency of the system processes based on smart contracts.
This set of functions is an already finished, developed product. Depending on the needs of a particular fund, these basic system features can be expanded. For example, the following can be added:
- the function of automated report generation and distribution,
- the function of building a referral program,
- any necessary additional tools in the user’s personal account.
The solution has two levels of interface: the user level and the operating level, using which the fund itself works.
For the user
The user enters the system following the link, connects his/her wallet and sees not only the projects which they took part in, but also those they were invited to with the invitation approved.
Displayed data: project names, dates, additional information, allocation status, token price, sum invested, number of tokens already received and those to be received.
For the administrator
- There is a list of all existing projects. If one goes to a specific project where distribution has already taken place, one will see a list of investors, the number of offered, deposited and distributed tokens.
- Project creation function: enter the name, description, price, future token icon, add investors.
- The distribution procedure. After creating the project, adding investors and transferring their investments, the administrator enters the token address, presses “distribute” and all investors receive the required number of tokens. It is possible to specify the maximum amount and use the FCFS function — in this case users can redeem as many tokens as they want.
Advantages of the solution from RSquad
The product from RSquad allows to automate the activities of a venture capital fund in the sphere of accounting and distribution of funds. All transactions made using this solution are public and therefore transparent. All investors, clients of the venture fund, will be placed on equal footing, exchanging and receiving tokens simultaneously.
Considering a transparent system of interaction with the fund, convenient and extensible tools for tracking all stages of investment, the speed of token distribution — the use of the solution from RSquad should thus make the fund attractive for investors.