Economic model

The economic model of DeFund protocol mainly consists of three parts: liquidity providers (LPs), general participants (GPs, who are also LPs if they participate in a fund), and the protocol. GP manages funds in a unified manner, carries out fund operation, earns income and shares it. LP can provide GP with a large amount of funds for its operation, and shares it with GP Carry according to its performance when redeemed.

Scenes	LP profit	GP profit	Platform fees	GP management fee
Fund profit	✅	✅	✅	✅
Fund loss	❌	❌	❌	✅
Redemption period	Maybe	✅	✅	✅

Profit calculation

When the fund makes profits, LP redemption generates profit sharing, and LP, GP and platform can all make profits.

\ Net value of the fund = valuation of the total amount of the fund\;/\;total fund shares

\ Redemption amount = net fund value\;*\;redemption share\;-\;redemption fee

\ LP holding cost net value = LP total investment amount\;/\;LP total share

\ Redemption principal = net value of LP holding cost\;*\; redemption share

\ EARN = Redemption Amount\;-\;Redemption Principal

\tag{DAO} DAO\;EARN = EARN\;*\;0.05

\ CARRY = \sum_{k\;in\;brackets} EARN_{k}\;*\;Rate_{k}

\tag{GP} GP\;EARN = CARRY\;*\;0.95

\tag{LP} LP\;EARN = EARN\;-\;DAO\;EARN\;-\;GP\;EARN

Contract External Method Management Fee & Carry