DeFi asset management platform Cook Finance is launching on the Ethereum network. The platform, which aims to make crypto index funds more accessible to investors and asset managers, was created by a team of Silicon Valley engineers formerly of Google and Dropbox.
Adrian Peng, the startup’s co-founder and CEO, noted:
"We’re still in the early stages of DeFi but crypto adoption is now at an inflection point as retail investors enter the market at an unprecedented pace. We’re providing these new investors with a trustless and decentralized way to diversify their holdings."
A Multi-Chain Vision for DeFi Asset Management
A UC Berkeley graduate whose resumé includes stints at Oracle, C3.AI and Google, Peng recently told Hacker Noon that Cook Finance will be deployed to multiple public chains including Binance Smart Chain (BSC) and Huobi Eco Chain (HECO). The platform’s mainnet smart contract has passed an audit by security specialists SlowMist.
Built on the belief that asset managers do not currently have enough professional investment tools at their disposal, Cook Finance provides everyday investors with an opportunity to create, issue and manage different funds including cryptocurrency baskets, dynamic yield farming funds and growth funds that adjust to fast-growing digital assets. Investors can onboard and start allocating assets to a premium selection of funds in a matter of minutes, with the trustless platform furnishing access to a plethora of highly liquid funds.
Within the Cook Finance ecosystem, users can invest in funds in exchange for LP tokens that represent partial fund ownership. These fund-specific LP tokens (ckTokens) can in turn be traded among investors, transferred between different public chains, and redeemed for the underlying assets in the fund – just like ETFs in equities markets.
Governance matters, meanwhile, are handled by a decentralized community of COOK token-holders who propose and vote on changes to the protocol. The same tokens can be used for staking and liquidity mining on the Seville and Lisbon pools, which offer yields of 65.3% and 65% respectively.
Cook Finance fund managers must pay 2% every time they claim management fees, 100% of which are distributed to the COOK token community. The make-up of various funds offered by the protocol vary according to users’ risk appetite, ensuring a selection of opportunities for different types of investor.
Interestingly, COOK token-holders can elect to share transaction fees among a large group of users who hold the same fund, distributing the burden of Ethereum’s often exorbitant gas cost.
Banking on DeFi’s Continued Growth
Projects like Cook Protocol are betting that decentralized finance continues the astronomic growth it has enjoyed over the past year. Indeed, the protocol’s whitepaper states that DeFi has the potential to grow into a multi-trillion dollar industry with hundreds of millions of investors.
Although the Total Value Locked in DeFi protocols has fallen from a high of $84 billion in May to $59 billion today, Cook Finance cites growing mainstream awareness of DeFi and crypto more generally. By acting as a gateway to digital asset index funds that utilize deep market analysis and sophisticated portfolio theory, the platform hopes to entice asset managers who are intrigued by the lucrative opportunities for which DeFi has become known.