FAST (Fully Automated System Trading): Tokenization of Funds and the Future of Finance

With FAST, everyone can design their own trading strategies using Pine Script, conduct backtesting, and analyze the results.

You can create your personalized strategy, essentially turning it into a fund. Others can review the backtested performance of your strategy and choose to invest if it aligns with their goals. Strategies with strong historical performance are likely to attract significant investment. Additionally, previous trading records are made transparent for verification.

Funds invested by participants are automatically managed according to the chosen FAST strategy. As part of this automated process, the owner of the strategy receives a portion of the profits generated for investors, as well as a share of the fees. The project can issue a proprietary token, $FAST, which can be used for payments within the ecosystem.

$FAST Token and Fee Benefits

Holding $FAST tokens grants users a VIP tier, which adjusts the fee structure depending on the tier level. This incentivizes users to accumulate and hold $FAST tokens for greater benefits.

Expanding the Ecosystem: Tokenizing the Fund

To further innovate, the fund can be tokenized in a manner similar to Liquid Staking Tokens (LST) or bonds, by issuing them as NFTs. For example:

1. Minting NFTs: When someone invests in a strategy, they receive a tokenized NFT (ERC-404) that records the investment details, such as the date of the investment.
2. Staking Period: The NFT can be staked with a maturity date, representing the locked investment period.
3. Maturity and Redemption: Once the maturity date arrives, the NFT can be burned, allowing the holder to redeem the principal and the generated profits.

Early Exit Mechanism

If an investor wants to exit the strategy before the maturity date:

1. The tokenized NFT can be sold to transfer ownership to another party.

1–1) When Liquidity Pools are Sufficiently Funded

If liquidity in the ecosystem is robust, the ownership of tokenized NFTs (representing the investment) can be transferred through SWAP mechanisms.

• Marketplace Trading: These transactions can occur on NFT marketplaces, where buyers and sellers agree on the terms based on the performance and perceived value of the strategy.
• This enables smooth ownership transfers without affecting the underlying strategy performance.

1–2) When Liquidity Pools are Insufficient

If liquidity is scarce, an exit penalty mechanism is applied, and the Project Team steps in to purchase the NFTs.

• The Project Team buys the NFTs at a calculated value:
• Average NFT Price
• Minus Fees
• Minus Depreciation (early exit penalty)
• This ensures the investor can still exit, but at a reduced value, incentivizing long-term participation and discouraging speculative early exits.

Conclusion:

By employing these dual liquidity management approaches, FAST ensures a balanced ecosystem, safeguarding both investor interests and the project’s sustainability.

This process allows for natural price adjustments, ensuring that the value of LSTs (representing the strategy) is lower than the expected returns due to penalties for early exits. Such penalties disincentivize premature withdrawals and ensure long-term commitment to the strategy.

This is an early-stage concept, and I believe it has the potential to evolve into a more advanced, specialized, and sophisticated form in the future.

While currently in a highly conceptual phase, I anticipate that the methods I propose could lay the groundwork for the next step in DeFi innovation. I firmly believe this idea represents the future of finance.

With fully automated system trading, such capabilities are no longer exclusive to Wall Street. Instead, they provide access to everyone, offering opportunities for real participation in a democratized financial system.

Take a glimpse into the future of finance.

Author: CB_BaekHui https://x.com/BaekHui_crypto Email: cb.the.changb@gmail.com