❓ FAQ

Fume is a web-based platform that uses blockchain to automate fund administration. It removes the need for traditional intermediaries like registrars and transfer agents by replacing them with smart contracts. Fund managers can create on-chain funds and run subscriptions, redemptions, NAV calculations, and fee management there, all while maintaining compliance with regulatory standards.

Unlike traditional platforms that add layers of complexity, Fume simplifies fund administration by moving the entire process on-chain. This removes intermediaries, reduces costs, increases transparency, and allows for faster, more efficient operations. Fume is particularly suited for funds managing digital assets but also supports traditional asset management strategies.

No, Fume is not a financial intermediary. It provides a software tool to automate the administration of a fund but does not control the underlying assets. The liquidity remains in a secure, segregated custody defined by the fund manager. Fume's role is purely administrative, and it never holds the assets.

The Tokenization Engine supports a wide range of fund types, including but not limited to:

• Digital Asset Funds: Funds investing in cryptocurrencies, tokens, and NFTs.
• Feeder Funds: On-chain feeders that collect capital in stablecoins and convert it to fiat for investment in traditional funds.
• Money Market Funds: Low-risk, liquid strategies for conservative investors, with hybrid on-chain and off-chain subscriptions.
• Hybrid Funds: Combining both traditional financial assets and digital assets, with flexibility to manage both on-chain and off-chain assets.

Unless you operate below a threshold (e.g. small AUM or a few investors), you should either use an existing fund vehicle or rely on our trusted partners to set up a new investment fund.

Fume's protocol automates fund subscriptions and redemptions using smart contracts. Investors can subscribe to a fund by sending digital assets (like USDC or USDT) or traditional fiat currency. After a Net Asset Value (NAV) calculation, tokenized fund units are issued to the investor's wallet. Redemptions are handled similarly: at the NAV calculation after the request, the tokenized units are burned and the amount owed is booked as a liability, which the manager pays to the investor's wallet.

Absolutely. In fact, our on-chain transfer agent fully automates the subscription and redemption procedures for in-kind subscriptions (e.g. stablecoin).

We also leave the door open for investors who are still coming from the traditional financial system. The on-chain transfer agent keeps a record of fiat subscriptions as well.

Although the administration is performed on-chain via smart contracts, there are no limitations on the underlying assets class. Therefore you can invest in stocks, digital assets, real estate and more.

Fume currently supports Ethereum, Arbitrum One, Base, and BNB Smart Chain. However, the underlying assets of the fund are not limited to these blockchains. Fund managers can hold assets on any blockchain or even off-chain with traditional custodians, centralized exchanges, or brokers, depending on their investment strategy. This flexibility allows for managing a wide range of asset types, from cryptocurrencies to traditional financial instruments like stocks or private equity.

Tokenized fund units are digital representations of investors' ownership in a fund, issued on the blockchain. Unlike traditional securities, these units are automatically issued, transferred, and managed via smart contracts. Each share class is its own permissioned security token with the ERC-3643 interface, held in the investor's own wallet. Fume keeps these tokenized units compliant with regulatory standards: only wallets the manager has verified (after their KYC checks) can hold them, and transfers between investors only happen when the manager switches them on.

Each share class is its own permissioned security token implementing the ERC-3643 token interface, the standard for permissioned securities that grew out of T-REX: a registry of verified wallets, freezing, forced transfers and wallet recovery. Like every ERC-3643 token it is built on ERC-20, the standard every wallet, explorer and DeFi protocol reads, so investors see their units in their own wallet. It is Fume's own implementation of the interface, not the T-REX contracts, and it uses the manager's own identity registry instead of ONCHAINID. Classes, each with its own price, high-water mark, fees and lock-up, cover the differences between groups of investors. The first version of the protocol used ERC-6909; Tokenized Units explains the current design.

Fume's protocol has been designed with security by design principles. Only the fund manager and whitelisted investors can interact with the smart contracts, which sharply reduces the risk of unauthorized access. Additionally, all operations are logged on-chain for full transparency. The platform uses multi-signature wallet solutions, rigorous testing (fuzz and invariant tests plus symbolic proofs), and re-entrancy guards. ChainSecurity reviewed the first version of the protocol; the current version is reviewed internally and formally checked to protect against common vulnerabilities.

Fume is flexible when it comes to custody solutions. To receive subscriptions, fund managers can connect any custody service, including self-hosted wallets (e.g., physical hardware wallets), multi-signature wallets (e.g., Safe Wallet), MPC (Multi-Party Computation) solutions, or even centralized exchanges like Kraken. As for holding and investing the assets any off-chain platform can be used. The custody of the assets is always under the control of the fund manager.

The automated "admin" part is similar, yes.

However, using Fume, you can:

• invest in any asset. On any chain, CEX, or even off-chain (e.g. stocks, real estate, etc.)
• receive investments via fiat, BTC, or any asset

The key difference is that, unlike us, tokenized vaults are non-custodial, which is a compelling proposition as well as very restrictive in terms of operations.