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Introduction

To showcase the best of our non-custodial technology stack, kpk Digital Assets (herein after referred to as "kpk") develops and distributes a range of actively-managed investment fund products, known as Onchain Investment Vehicles (or "OIVs").

OIVs are a decentralised asset management system, designed to deploy crosschain investment vehicles. The system supports the creation and management of multiple funds, each tailored to specific denomination assets such as USDC. These funds can be permissioned, requiring Investors to be whitelisted for participation, or permissionless, allowing open access to any Investor. This dual structure ensures flexibility to meet the needs of both controlled and open investment environments.

Our funds offer the best of kpk's investment strategies, permissions and execution management, and security monitoring tooling, but in a genericised form factor that minimises costs and maximises efficiency.

This page provides a high-level overview of the structure, operations and governance of our fund products.

Actively-managed Funds​

kpk developed actively-managed funds to bridge the gap between our bespoke active management engagements for specific DAO treasuries, and the passive investment products more commonly found in DeFi. There is no shortage of ways to invest assets passively in DeFi, but good active management is rare and often expensive. Actively-managed funds are a way to distill down the benefits of kpk's core treasury management operations, but using a form factor and fee structure that remains accessible to all kinds of Investors.

The platform is designed with scalability and interoperability in mind, addressing challenges such as multi-chain synchronisation and efficient bridging operations. It also incorporates customisable fee structures to incentivise growth while maintaining transparency, security, and operational efficiency. By emphasising trust, decentralisation, and adaptability, our platform offers a secure and streamlined solution for onchain asset management.

The key unique selling points of actively-managed funds are:

  • Non-custodial - all Investor assets are held in smart contracts where no single Investor or entity has full control, meaning no one party can take custody of the Investor's assets. Only the Investor is able to withdraw their assets, and fund tokens are non-transferrable.
  • Flexibility - funds are built on Safe smart accounts that retain the full flexibility to handle any kind of DeFi asset or activity. As such, the selection and allocation of investments can be changed rapidly and flexibly as needed, depending on the precise permissions process of a given fund product.
  • Active Strategies - all fund products benefit from kpk's existing roster of expert DeFi strategies. We build out a common repetoire of strategies across all of our use cases and form factors, meaning funds benefit from the same opportunities as our largest and most sophisticated Investor treasuries.
  • Risk Management - similarly, all funds are managed with the same expertise, systems and processes as our Investor treasuries. From security monitoring to strategy due diligence and product testing, kpk applies a robust uniform approach to risk management across all of our solutions.
  • Crosschain - kpk's funds are some of the only DeFi products on the market that deliver native crosschain asset exposure in a flexible manner. This means Investors can select funds safe in the knowledge that assets can be reallocated as different chains go in and out of fashion, and yield sources rotate.

Core Architecture​

Investors can subscribe the denomination asset e.g. USDC into a fund to receive share tokens, which represent a share of the underlying portfolio. These share tokens can later be redeemed for USDC at a price reflecting the NAV variation, providing exposure to the returns of the fund.

At the core of the system is a flexible architecture that includes a Shares contract deployed on the Ethereum mainnet. This contract manages Investor participation and ensures the integrity of share ownership. Each fund’s value is calculated using decentralised NAV (Net Asset Value) calculators deployed across various chains. These calculators aggregate token balances and query decentralised oracles to provide accurate, real-time valuations, ensuring that the total value of each fund remains up to date, even in a multi-chain environment.

Fund Anatomy​

Fundamentally, kpk's funds are an instance of our non-custodial management stack, which has been designed from the ground up to facilitate full flexibility in strategy selection and asset deployment, whilst connecting to all manner of tools for permissions, security, and automation. By incorporating all of the core elements of our stack, but defining a standardised form factor for its use, we believe our active-managed funds deliver the perfect combination of useable and scalable products with flexible and sophisticated designs.

The core components of kpk funds are:

  1. Portfolio Safe - a multi-chain and multi-signature Safe smart account that manages the underlying positions, holding spare assets and deposit receipts.
  2. Onchain Investment Vehicle - the vault contract which connects Investor funds and the Portfolio Safe. The OIV manages the issuance of shares and redemption of funds.
  3. Net Asset Value Calculators - a seies of smart contracts on each chain which use onchain data to calculate the net asset value of the portfolio held on that chain, and communicate that value back to the OIV.
  4. Zodiac Roles Modifier - a smart contract system that manages the allocation of roles and permissions for the Portfolio Safe, ensuring that only pre-approved strategies can be executed using the specified non-custodial execution techniques.
  5. Automated Risk Management - a series of onchain applications and agents which monitor for and trigger reactions to all manner of risks, from price volatility, to known attack patterns or simple abnormal behaviours.

Investment Strategies​

At heart, actively-managed funds are all about diversifying risk across many chains, many protocols and many assets. Though kpk only pursues high-quality opportunities for battle-tested and due-diligenced platforms, past performance is no indication of future safety, and diversification is the ultimate protection for Investor funds.

kpk applies a rigorous process of strategy selection and risk management to decide on the allocation of funds, including:

  • Market Analysis - analyse economic indicators, market sentiment, and technical charts to understand the broader market context and identify trends.
  • Fundamental Analysis - evaluate projects’ technical infrastructure, team credentials, and tokenomics to assess the intrinsic value of crypto assets.
  • Risk Management - diversify holdings, monitor liquidity, set position sises, and assess risk-reward ratios to mitigate potential losses and manage exposure.
  • Portfolio Rebalancing - regularly review and rebalance the portfolio, reinvest profits, and ensure liquidity to maintain the desired risk-return profile.
  • Continuous monitoring and adaptation - use real-time data, track performance metrics, implement a feedback loop, and leverage advanced tools to stay responsive to market changes.

Ultimately, the desired effect of kpk's actively-managed funds is to deliver the same industry-leading approach to active management that has historically been reserved for only the largest and most-sophisticated treasuries, and to package this in a manner that any Investor can access.