What is Enzyme Finance (MLN)?
Enzyme Finance, formerly known as Melon Protocol, is a protocol built on top of Ethereum (ETH) that allows users to create, manage and invest in dedicated crypto asset management vehicles.
Enzyme aims to decentralize traditional asset management, a field that has historically made it the domain of financial advisors and professional firms. The idea is that the original cryptocurrency, MLN, could lower barriers to entry for asset management, opening up access to a growing number of global consumers.
For example, managed funds usually require a minimum amount of investment and management fees, which can put this wealth tool beyond the reach of the average consumer.
Further to the reach is their ability to create an asset management fund, which currently requires large capital and legal advice. In addition, it can take years to even file documents for funding.
Enzymes aim to produce alternative systems. Using the project’s web portal, users can invest in funds and portfolios launched by other users and other users can invest in their creations. The Enzyme Finance protocol enables MLN crypto to perform various operations on the platform.
Enzyme keeps updating its roadmap status via its official website & blog.
How does it work?
Enzyme Finance is a collection of smart contracts whose calculations are performed by the Ethereum blockchain.
Due to this design, fees for transactions are paid in Ether. This fee includes the cost of using Ethereum computing power & Enzyme software.
The protocol itself consists of 2 layers, a fund layer, and an infrastructure layer, and comes with its own Javascript library that enables web browser support.
Fund Layer
The Fund Layer is where users launch and control the funds that other users can invest.
Each fund contains 2 parts, namely:
Hub
The hub is considered a core part of the fund layer, as it provides all the tools needed to set up funds and track the components that make up the fund.
The Spokes
The Spokes use smart contracts to determine funds, which are created by each fund manager, and provide specific services to the fund. Examples include the Vault, a component used to store tokens in the name of funds and shares, and a component that tracks fund holdings.
Infrastructure Layer
The infrastructure layer is controlled by the Melon Board, DAO Enzymes. Some parables of infrastructure contracts on others:
An “adapter” contract, which connects a specific asset with a price feed for trading.
A “machine” contract, which buys MLN for ETH to help pay for certain calculations.
A “price source” contract, which provides the general information needed for action in the fund.
