Insula Protocol

Funds Interface

The current use of the CoTrader and Melon protocol interfaces means users of Insula Funds need to understand the different UI's and keep track of the shares tokens that often have the same name.

Insula believes that a uniform UI which abstracts from the Melon and CoTrader protocols and offers the same basic features is in our best interest.

Why?

If we are able to create a layer between these protcols and the Insula user, then we would be able to implement features into the experience without relying on the other protocols to develop them. This means that the experience is uniform over all Insula funds and can be controlled.

Features

Some of the key features we would want to develop are the following:

• The ability to redeem shares in one coin.
  Currently, if a user invests 100 ETH into a fund, and we decide to diversify into 50 coins, then when it comes time to redeem the shares the investor will receive 50 different coins. This alone is enough to discourage new investors from investing in largely diversified funds. If we can have a layer between the two that is able to trade back these 50 coins into a single asset, then we can facilitate the redeeming process for the investor. However an investor would be able to redeem their shares and receive the 50 tokens if they so choose as this may speed up the recovery of their assets.
  Questions left to answer are: Who pays for the fees to trade everything back?
  What if there is no liquidity?

• Creating new tokens for shares
  Both CoTrader and Melon use ERC-20 Tokens to represent shares within a fund. However these tokens all have the same symbol within the protocol. Ideally, we would want to create new ERC-20 tokens for funds. The investor would interact with a smart contract sending the investment asset. The contract would then invest in the fund and receive the fund tokens. It would then store these and give an equal number of our tokens to the investor. This is highly dangerous because the tokens we give to the investor cannot be redeemed directly on the protocols, and if an error in the contract prevents users from redeeming shares then the assets are lost. However creating these tokens would allow our funds to operate as ETF, or 'stable' like coins backed by a diversified basket of cryptocurrencies. This would also allow users to trade away their coins instead of redeeming.