• Wrapping the results off-chain asset adoption, performed by an INK DAO, into uniformity;
• Creating financial products that are backed by the adopted assets. Note that these financial products themselves are also represented as Ink Envelopes;
• Transparent on-chain settlement and clearing;
• Setting risk control triggers and operation triggers for the financial products;
• On-chain analysis regarding the assets or the financial products – peeking into the Ink Envelopes;
With INK Products Module working around Ink Envelopes, the complicated features of bespoke assets, and the financial products created out of them, are made easy to process and understand. A wide range of financial products – from singleton security of equity or right, to collateralized debt obligations, to portfolios of passively or actively managed funds – can effectively and elegantly issued, traded,and cleared (see the following slide for some of use cases).
• Every pledger has the tendency to default on the making up shortfall when prices drop sharply. INK’s shortfall auction, part of the Products Module that utilizes the Ink Envelopes, can turn obligation into a significant potential reward.
• This auction is similar to the bidding of a call option on the collateral, except in INK’s mechanism the premium is not spent when the option is exercised.
• INK also introduces a game-like “tranching” mechanism to provide market-driven risk/reward distribution at the initial placement auction. Any investor can choose to take a senior or junior position in a debt financing deal, and INK automatically adjusts the risk & reward of the two different positions as they are being formed.
• An ETF is a passively managed fund, which is invested in a portfolio formulated by a number of specific targets. That such a passive fund’s share can be listed and traded on an exchange (hence “ETF”) is assured by Ink Envelope’s abstraction power – any financial product can be detached from INK domain as a fungible token, therefore immediately tradable on any locally available DEX.
• With INK Products Module, a crypto asset managing DAO can formulate composition formulas with many risk management and execution rules.
• INK’s ETF constructor supports two redemption modes: liquidation at maturity and instantaneous asset swap.
• Small-to-mid sized DAOs seeking to quickly launch their fund operations can conveniently brand themselves to investors on multichains.
Holding Funds of Private Assets
• They can hold the ownership of anything from the off-chain world that is not in immediately tradable form. They are discretionarily managed, and the INK Products Module enforces rules regarding outflowing proceeds, to make sure they strictly go through the audit structures.
• Such a fund format can become a SPAC-like (Special Purpose Acquisition Company) acquisition vehicle, a powerful “raise-first-and-buildup-later” scheme, that can target collectable arts, production rights, metaverse assets, or equity rights of innovative projects.
• Ink Envelope’s abstraction enables complex fund management details to be encompassed, making these funds available to regulated crowdfunding institutions, or regulated on-chain auction houses, to scrutinize or implement.