🔧 How Does It Work?
The architecture of the Tokenization Engine: supported networks, smart contract functions, and accounting methods.
Fume is a web application that operates on top of its proprietary on-chain protocol, which is built on EVM-compatible smart contracts. The platform currently supports Ethereum, Arbitrum One, Base , and BNB Smart Chain, with Arbitrum being the preferred choice due to its lower cost and faster execution.
Investor Interaction
Investors can participate in an on-chain fund either by investing with stablecoins or through traditional fiat currencies. The platform removes many of the barriers typically associated with blockchain-based investments.
Fund Manager Tools
For fund managers, Fume offers full flexibility in managing assets. The manager can connect any preferred custody solution to the on-chain fund to receive subscriptions and manage the underlying assets. The funds stay stored and managed securely, and Fume never touches the money itself.
Automated Protocol Functions
The smart contracts handle:
- Tokenized Fund Units: The protocol issues each share class as its own permissioned security token (ERC-3643 interface, built on ERC-20), held in the investors' own wallets.
- NAV Calculation: The smart contracts price every share class from the fund's equity. Every calculation is recorded on-chain.
- Fee Computation: The protocol computes management, performance, entry and exit fees automatically and books them as liabilities for the manager to settle.
- Subscriptions and Redemptions: Units are issued and redeemed at the class price at each NAV calculation, and the amounts owed are booked automatically.
Because these run through smart contracts, there are no manual errors or extra fees.
Share classes
A fund can have several share classes, each with its own token, price, high-water mark, fees and lock-up. One NAV calculation prices every class from a single equity figure. Every investor in a class buys at the class price, fees are reflected in that price, and the performance fee crystallizes per period (monthly by default), so investors who entered at different times are treated fairly without adjusting anyone's units. See Tokenized Units for details.