MC² Finance is a protocol and multi-faceted marketplace that provides structured portfolio management on-chain. Standardized multi-chain portfolios capture efficiency gains and scalability opportunities from blockchain technology, while the marketplace incentivizes actionable top-tier digital asset strategies benefiting DEXs, crypto-natives, novices, custodians, and institutions.
The rise of DeFi, democratization, and accessibility to participate in market activities elicits a new paradigm of integrity in the global financial marketplace (Zetzsche, 2020).
The following whitepaper introduces the MC²Finance protocol. Specifically, the whitepaper demonstrates the opportunity for trustless smart contracts and an incentivized marketplace for portfolio strategies in the nascent Web3 DEX Market, providing practical use cases, a product market landscape analysis, and modeling methodologies on MC²Finance.
*We are continuously evolving as will this documentation
Problem statement
With the arrival of blockchain technology, the requirement of intermediaries and accompanying fees for the asset management activities of traditional finance are now occurring inefficient. Specifically, the settlement layer for programmable finance through smart contracts has both decentralized the world's financial systems (DeFi) and increased transaction efficiencies. The current landscape is broadly characterized by a lack of accessible, transparent, and efficient solutions for investing strategies in digital assets, which creates confusion and uncertainty for potential investors.
The challenges facing mass participation and adoption in Web3 decentralized financial digital asset management range from a lack of knowledge or time constraints, landscape and inefficiencies of current solution offerings in a nascent market. Centralized finance solutions take on institutional risks and return isolated solutions. Decentralized solutions are typically single-chain, niche, and scattered with a focus on short-term trading. Furthermore, they are complex to navigate with no clear guidance on investment strategies.
How to invest in tokens?
Method | Problem |
Centralized Exchanges | Low yield returns and high institutional risk. Entrusting crypto to a third party - “not your keys, not your tokens.” |
DeFi (eg. Bot Strategy) | Impermanent loss and risk of hacks, analysis paralysis (too many disparate choices). |
Decentralized Exchanges & Launchpads | Novel strategies, and require deep knowledge, analysis paralysis (too many disparate choices). |
Wallet | Chain dependent and no yields. |
Crypto Venture Capital | Institutional risk and need access to participate - minimum entry ticket + connections. |
From the perspective of traditional finance, only one in seven directly invests in stocks or holds stocks. More than 50% indirectly invest through funds, indexes, or other asset management structures. In Web3, over 95% hold and invest tokens directly. An average user has no desire to spend hours researching the returns, decision-making processes, organizational structures, and leadership teams of every token asset in a token portfolio strategy. A large gap exists between what users want and available options for solutions for investing strategies. In order to address these challenges and democratize asset management, we introduce MC² Finance.
Solution: MC² Finance protocol
A Comprehensive Cross-Chain Marketplace for Token Portfolio Strategies.
MC²Finance facilitates the global democratization of digital asset management by simplifying and diversifying the creation and management of earning strategies through standardized multi-chain portfolios.
”The tokenization of asset classes offers the prospect of driving efficiencies in capital markets, shortening value chains, and improving cost and access for investors” - Larry Fink, CEO BlackRock
MC² Finance’s marketplace provides incentives for top-tier DeFi strategies and incorporates innovative rating (auditing) technology that gives agencies the ability to define standards to facilitate the entry of institutional capital to Web3.
The MC²Finance protocol consists of 5 key parts:
1 → Non-Custodial Portfolio Technology: MC² Finance’s core technology standardizes portfolios across all chains. Any strategy can be wrapped in a portfolio with a simple accruing token. The accruing token can be listed, shared, traded, or bridged. The portfolios are visible to the MC² Finance marketplace. MC² Finance elevates social trading and standardization and simplifies participation in DeFi. 2 → DEX and Wallet Integration: MC² Finance fully integrates with decentralized exchanges and wallets, and partners with leading trading and exchange institutions to provide seamless access to DeFi products and services. Example: DEX’s can easily insert the “Invest” integration button linking directly to MC² Finance’s expert portfolio strategy marketplace. 3 → DeFi Product Integration: MC² Finance provides access to appreciative tokens (ie. liquid staking), lending, automated bots, and non-public strategies. Portfolio-Tokens will serve as collateral on protocols in the future. 4 → Social Clubs for Experts²: MC² Finances’ Social Tokens are ERC-20 and can be used for any token-gated activities for Experts² and Rating-DAOs to define and curate audiences for their Expert Strategies² and exclusive content. Social Clubs have their own token and bonding curve, in addition to the main MC² Finance token, providing asset-backed guarantees. 5 → Auditing via Rating-DAOs: In traditional finance, rating agencies perform audits to ensure the integrity of financial systems and products on an annual basis. Web3 requires similar mechanisms and blockchain technology enables auditing automation. Our protocol allows DAOs to verify portfolio strategies on the MC² Finance marketplace in real-time, and create audit codes that stipulate parameters for institutional investors.
Project goals and objectives
As MC² Finance facilitates the global democratization of digital asset, and has the unique opportunity to lead, standardize, and onboard institutional finance and funds is a primary objective and opportunity. We will be building and collaborating on the most innovative DeFi strategies, in addition to developing collective and individual knowledge of what is possible for portfolio management on-chain.
MC² Finance’s goal is to support the mass adoption of Web3, define and translate structured digital asset products, and layer exclusive portfolio strategy content through an expert marketplace.
Specific MC² Finance project goals and objectives:
1 → Non-Custodial Portfolio Technology: Provide Users² and Experts² with the agency to both build strategies, whereby reduced fees and access democratize wealth. 2 → DEX and Wallet Integration: Simple integration widgets and API’s with robust, secure infrastructure easily accessible to potential DEXs, wallets, and custodians. 3 → DeFi Product Integration: Enable deep integration of protocols to increase strategy variety, and rewards and enable these protocols to gain additional reach on our integration partners. 4→ Social Clubs for Experts²: Enabling token-gated strategies and advanced verification. Providing exclusive portfolio strategy content for Web3. 5→ Auditing via Rating-DAOs: Provide standards and real-time, multi-chain auditing for strategies enabling DeFi onboarding of traditional institutions.
*Lastly through the community,MC² Finance seeks to provide knowledge transfer and participation opportunities through programs such as the ambassador program.