I'd like to propose something for funds which, if implemented could make the funds much more versatile and resistant to market crashes as it will allow managers to preserve capital more efficiently. Additionally it could create higher demand for GVT on the market which will raise prices and bring liquidity to the market.
My proposal is as follows:
Currently, funds are reallocate-able at 3% per day with a forced 1% allocation to GVT . Although this is a fair amount, when market crashes are looming and a manager has no more % allocation left he and his investors has to face the market crash and often loses a considerable amount. The lack of a capital preservation tool makes the funds un-appealing to some.
Crashes can occur up to twice a month in this volatile market and therefore it is important that the tools we use are well adjusted.
I suggest it be made possible to 'purchase' and additional 50% reallocation in your fund in exchange for an additional 1% allocation of your fund in GVT.
Cap the allowed purchase of reallocation credits to 100% per month. (leave the current 3% per day rule allocation as is) .
So if a manager purchases 100% reallocation, his fund need to have a minimum 3% GVT allocation. After 30 days the limit is reset to 1%, but manager has to manually change it when he pleases.
If a fund has 100,000 USDT of AUM and suddenly needs to purchase 100% allocation to save itself from a flash crash, that means an additional 2% needs to be allocated to GVT for atleast 30 days This would imply $2000(2%) of GVT being bought off the market, with no direct cost or penalty to the manager or investors.
Obviously there are some things which need to be ironed out, but in principal i think this could be a very nice feature.
(maybe additional perks like "if you hold more than 10% of your fund as GVT for more than 30 days you are eligible for 1x free 50% reallocation, expiring in 30 days or something like that)
Please leave your comments/thoughts below and like this suggestion so that the team can add it !
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