📋 Registrar & Transfer Agent
How smart contracts replace the traditional registrar and transfer agent.
In traditional finance, the registrar and transfer agent are key intermediaries responsible for tracking who invested, managing fund subscriptions, and facilitating the movement of money. These intermediaries often introduce delays, costs, and the potential for human errors. In the Tokenization Engine's on-chain solution, smart contracts replace this entire process, which eliminates the intermediaries and drastically reduces errors.
⚠ Fume is Not a Financial Intermediary
Fume is not a financial intermediary. Instead, it is a protocol comprised of smart contract code designed to automate fund administration processes. The liquidity itself is controlled by the fund manager: subscriptions are forwarded to the fund wallet the manager has set, and payments out of the fund contract only go to booked liabilities, all recorded on-chain. Fume's role is purely to automate the administrative processes through code, without ever holding the assets.
On-Chain Investments
With the Tokenization Engine, investors invest by sending capital from their wallets directly to the fund's smart contract. This capital is then held in the smart contract, pending the next Net Asset Value (NAV) calculation. At that calculation, the liquidity moves to the fund wallet and tokenized units of the investor's share class are issued to their wallet, representing their ownership in the fund. This way the capital is properly valued before it is fully processed.
Unlike traditional systems where transactions can be blocked, delayed, or subject to hefty fees, Fume's smart contract eliminates manual errors and speeds up the process. Investors avoid common issues like sending funds to the wrong address or network. They simply connect their wallet, click "deposit," and the transaction is automatically prepared and executed by the protocol.
Off-Chain Subscriptions
Fume also supports off-chain subscriptions for investors who prefer traditional payment methods. For instance, fund managers can share bank details with an investor, allowing them to make a wire transfer. Once the funds are received, the manager confirms the reception to the smart contract, which issues the corresponding tokenized units at the next NAV calculation.
Redemptions and Fees
When an investor wishes to redeem their investment, they request it from their wallet. At the next NAV calculation, the tokenized units are burned and the amount owed is booked as a liability, which the manager pays to the investor's wallet. Entry and exit fees are automatically calculated and booked by the protocol, which keeps the process smooth and transparent. This automation also removes the need to communicate the details of each transaction to the fund administrator.
The Unit Register
The register is the list of holders of each share class token. When the manager allows it, units can move between wallets the manager has verified, and every movement updates the register on-chain. See Tokenized Units.