Merlin Protocol
  • Merlin Protocol
    • Intro
    • 0. Abstract - Features Implemented at the Choice of the DAO
    • 1. Decentralization and DeFi
      • 1.1 Features implementable at the choice of MerlinDAO
      • 1.2 Computer system
      • 1.3 Onchain Vs Offchain
      • 1.4 Risk Management
    • 2. The Merlin token, the MerlinDAO and future scenarios
      • 2.1 Merlin token (MRN)
      • 2.2 Merlin DAO
      • 2.3 Scenario of possible monetization of the MerlinProtocol
        • 2.3.1 Liquidity in the Liquidity Pool, Token Buyback and Burning
        • 2.3.2 The types of commissions that end up in the Liquidity Pools
      • 2.4 Staking
      • 2.5 Tokenomics
    • 3. Funds
      • 3.1 Top Cap
      • 3.2 Middle Cap
      • 3.3 Thematic Baskets
      • 3.4 Basket managed directly by MerlinDAO
      • 3.5 Index managed by AI
    • 4. How to use WebAPP to create and invest in TokenXFund decentralized funds
      • 4.1 Aladin fund creator user
        • 4.1.1 Use Case UCF1
      • 4.2 User investor of a fund
        • 4.2.1 Use Case UIF1
        • 4.2.2 Example: UIF1 use case
        • 4.2.3 UIF2 use case
        • 4.2.4 Example: UIF2 use case
    • 5. The creation and management of managed funds
      • 5.1 Active management
      • 5.2 Performance and benchmark
      • 5.3 Performance fees
      • 5.4 Ranking of Managed Funds
    • 6. Tokens to invest in
      • 6.1 The selection criteria for big and mid cap tokens
      • 6.2 Selection criteria for small and micro caps and ranking of tokens to put in portfolios
      • 6.3 Portfolio Composition Limits
    • 7. Oracles
      • 7.1 Decentralized Oracles
      • 7.2 Oracle design pattern
      • 7.3 ChainLink oracles —> (ChainLink Docs)
      • 7.4 Decentralized Data Model
      • 7.5 Data Security
      • 7.6 Uniswap v3 Pricing Oracles —> (Uniswap V3 whitepaper)
      • 7.7 Random Number Generator Oracles
    • 8. Swapping for fund rebalancing
      • 8.1 What is a Swap and why to Swap
      • 8.2 How to Swap
      • 8.3 When to Swap
      • 8.4 Javascript SDK for Uniswap v3
      • 8.5 DEX Expansion
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  1. Merlin Protocol
  2. 4. How to use WebAPP to create and invest in TokenXFund decentralized funds
  3. 4.2 User investor of a fund

4.2.2 Example: UIF1 use case

Previous4.2.1 Use Case UIF1Next4.2.3 UIF2 use case

Last updated 2 years ago

A numerical example is given below to provide greater clarity on how a generic SCF investment fund participates. It is relevant to note that the fees of the computer system and the user creating the fund are not included in these calculations for simplicity.

A user C creates through the computer system MerlinProtocol a personalized investment fund, initializing its parameters.

Then a second user, I1, intending to invest 10 ETH in the SCF, sends the sum in ETH from his wallet to the Smart Contract SCF.

I1 receives 1000 SCFToken on his wallet, as a tangible proof of his participation in the SCF fund. ETH->SCFToken exchange rate 1>100.

A third user, I2, wishing to invest 100 ETH in the SCF fund, sends the amount in ETH from his wallet to the SCF Smart Contract in a predefined time window during the day, in which the value of the fund is recalculated at the beginning and the entry of new investors is enabled again.

Let's assume that the fund is now worth 20 ETH in ETH counter value of the tokens on it. I1 will then hold 16.66% of the fund as a result of I2's transaction, while I2 will hold 83.33%.

I2 then receives 5000 SCFToken on his wallet, as tangible proof of his share in the SCF. ETH->SCFToken exchange rate 1>50.

Two other users, I3 and I4, wish after some time to invest in the SCF fund. They intend to invest 60 ETH and 18 ETH respectively.

Let's assume that the fund is worth before their entry 180 ETH in ETH value of the tokens present on it, of which I1 owns 30 ETH and I2 owns 150 ETH.

I3 then receives 2000 SCFToken on his wallet, as tangible counter-evidence of his share in the SCF.

I4 instead receives 600 SCFToken on his wallet as tangible proof of his share in the SCF fund.

ETH->SCFToken exchange rate 1>33.33

Yet another user, I5, who wants to invest 100 ETH in the SCF fund, sends the amount in ETH from his wallet to the SCF Smart Contract in a predefined time window during the day, in which the value of the fund is recalculated at the beginning and the entry of new investors is enabled again.5

Let's say that the SCF fund, which after the entry of I3 and I4, was worth 258 ETH. Let us assume that the SCF fund loses one-third of its value, thus 33.333 % of its ETH value. The SCF is then worth 172 ETH in countervalue.

I5 then receives 5050 SCFToken on his wallet as tangible proof of his share in the SCF. ETH->SCFToken exchange rate 1>50.5.

New eth->SCFToken exchange rate = 1 / (Current fund value / Previous fund value) * previous exchange rate