Asset management is a $150t industry in TradFi which has thus far failed to take hold in crypto, with protocols like dHedge and Melonport failing to achieve PMF. The primary reasons for this as we see them are lack of on-chain privacy, lack of on-chain liquidity relative to centralised venues, as well as lack of regulatory clarity. Nevertheless, we see this as an inevitable primitive which is likely to be built on top of the winning DEX or Leverage Protocol.

Asset management can broadly be split into automated and discretionary strategies. Automated has arguably already achieved PMF in DeFi, with AMMs/vault protocols being examples of this. Cosmos is well-served on the automated front with protocols like Astroport, Sommelier, Apollo, Quasar, and others. Discretionary asset management is the more difficult nut to crack.

We believe one promising avenue here is building on top of Mars credit accounts. Mars credit accounts are DeFi cross-margin accounts allowing users to perform leveraged interactions with a variety of whitelisted protocols. These credit accounts are represented as NFTs, and we believe fractionalising these NFTs opens up a vast design space for both automated and discretionary strategies.

On the discretionary side, managers could tokenise their credit accounts and allow users to buy shares. Logic could be built on top to mimic maintenance/performance fees, limit what managers can do with the credit account, allow for automated redemptions, etc. In the long-term, these credit accounts would represent managers’ verifiable trading performance and act as their on-chain resume.

On the automated side, there are several potential interesting strategies such as all manner of leveraged LPing vaults (Ex: Leveraged Passive LPing, Actively Managed Concentrated Liquidity LPing, Actively Managed Top LPing Pools, etc.), auto-rebalancing crypto tokens (Top Tokens by marketcap), leveraged staking strategies, as well as multi-step Yearn like strategies (e.g. Degenbox). These strategy vaults could also be fractionalised with shares trading on secondary markets.

Example of Strategies:

Where: This would make most sense on Osmosis since this is currently the only Mars outpost.

Mentor: Davide (Product lead at Delphi Labs)

Hackathon MVP: A new primitive can be built on top of credit accounts, where a discretionary account manager is limited in entering and existing positions in a credit account, but not deposit or withdraw directly. Deposits/Withdrawals can be implemented with Minting/Burning fungible shares of the account (effectively fractionalizing the account NFT) akin to a vault. Performance fees.