Future of Web 3: Reality → OpenPool
Bringing traditional finance ETFs to Crypto
Hello Everybody-
For those who were in NYC last week, what a week. Lots of hype and reality. This piece is my third post in my continuing hype vs reality series for web 3. View the original post below.
Feel free to follow me on Twitter below and feel free to connect me with anyone hiring in web 3/crypto/investing, I am on the job hunt.
Email: Thomas@genzvoice.com.
Good morning, today we are talking about OpenPool.
Background:
OpenPool is bringing a traditional finance product, Exchange Traded Funds (ETFs), to the blockchain. Through innovative technology, customers ranging from retail traders to professional investment advisors would be able to buy OpenPool’s ETFs on-chain and limit risk to volatility in the overall crypto industry.
Traditional ETFs are funds that are traded on public markets that are made up of a handful of different investment assets. Most of the time they consist of a basket of stocks from a specific section or index, and sometimes they can even include commodities, real estate, or other financial assets.
OpenPool’s Difference
In OpenPool’s case, they are focusing on building ETFs directly on the blockchain and having these funds consist of a basket of different tokens. Let’s break it down.
Example: On OpenPool someone creates a fund called “The Basics”. This ETF consists of Bitcoin, Ethereum, and Solana, all equal weights. This ETF is then put on the blockchain under a token called “Basic Token ETF”. When a user buys this token they get exposure to all of the assets in the fund, just like a public market ETF would. The key difference here is it will be on-chain and you would be buying a token that represents the underlying cryptocurrencies in the fund.
Why is this a reality in the future of web 3?
We have already seen an explosion of products from traditional finance coming to web 3 in waves. Interest accounts, lending products, options, derivatives trading, etc. In my opinion, it is surprising that ETFs have just made their appearance.
And let’s think about it, this just makes sense, right? ETFs are historically a product that spreads risk across a diverse basket of assets. Most people aren’t like today’s crypto investors. They cannot deal with the major volatility swings in the market and prefer to stay away for now. OpenPool’s on-chain ETFs can provide a solution to risk-averse traders and, most exciting, financial advisors and managers.
From recent conversations, FA’s and managers in the space know that crypto is not going to go away, they have accepted that. Now the next step is for them to figure out the best way to incorporate this new asset into client portfolios. For most, buying direct assets does not fit inside risk parameters, but buying ETFs, that's a different story.
I am very bullish on OpenPool after meeting the team and believe they have the best background to build out and scale this product to retail investors and professional investors.
If you would like to connect with them, shoot me an email at thomas@genzvoice.com.
So, what would your crypto ETF consist of?