Choose an element to explore
Identifiers
A fund token is composed of these elements
Note: This token design is illustrative only; actual components would vary based on specific requirements
Source: Bain & Company and Onyx by J.P.Morgan
Fund Name
Share Class
CUSIP/ISIN
PE Fund L.P.
Class A
78520M102
Nav per share
Total number of shares issued
$50,000
1,000
Holders
KYC status
Commitment ($1,000s)
Sharing %
Drawdown ($1,000s)
Commitment date
Drawdown date
Investor 1
...
...
...
...
...
...
...
$5,000
10%
$500
30.06.18
21.01.19
Investor 2
$10,000
20%
$1,000
23.11.18
21.01.19
Investor 3
$5,000
10%
$500
20.07.18
21.01.19
Subscribe
to the fund
Redeem from the fund
Transfer
fund shares
Call
capital
Drawdown capital
Data held on the token
Logic held on the token
The net asset value per share metadata in a token captures the periodic valuation of shares and may be sourced from back-end fund accounting systems, as occurs today.
The total number of shares issued (supply of tokens) is defined upfront, like issuing book-entry shares in fund issuances today.
The token includes details of the shareholders’ total capital commitment and their proportional ownership in the fund. It tracks the remaining capital obligation and the amounts drawn down to date and total capital distributed to the shareholders to date.
Encapsulating details into token representation allows different views to be generated for reporting, tracking, ownership transfers, and so on. Having this information on a shared recordkeeping system reduces need for constant reconciliations to agree on the state of ownerships.
Information about investments and expenses of the fund may be sourced from elsewhere but could be recorded in consonance with the fund token to apportion them in the same ratios as commitments into the fund.
Fund-lifecycle business logic can be encoded and held inside the token. Such business logic acts on the ownership data held on a token and updates the state of ownerships and balances.
The embedded logic ensures that the ownerships and balances of the fund can be updated with limited human intermediation.
Transaction rules can also be encoded into the token at a granular level—for instance, KYC/accreditation approval before transfers.
A fund token is like a digital certificate of ownership, similar to how share certificates in transfer agency systems represent ownership in a traditional fund.
Tokens on blockchain represent ownership pseudonymously. Sensitive shareholder information can be kept private by obfuscating on-chain information, or storing identities and details offchain, or both.
A key difference between a fund token and a traditional book-entry fund share is that a fund token holds both data and encoded business logic.
The token has a unique identifier allowing it to be invoked, an interaction akin to how a fund issuer would manage a fund through a transfer agent.
Although the token may hold a unique ID mapping the investor details to ownerships, the actual investor onboarding information and details may be stored in other linked databases to ensure privacy of investor information.
Logic to accept digital cash and issue shares
Logic to cancel shares and return cash to investors
Logic to enable compliant transfer of shares
Processes capital calls and updates state of the ledger
Logic to process
drawdowns and update state of ownership of the token
Tokens on blockchain represent ownership pseudonymously or anonymously
Sensitive shareholder information can be kept private by obfuscating on-chain information or storing identities and details offchain
or both
Transfers of tokens update the ownerships and balances directly at the token level thus removing the need for cumbersome reconciliations
Logic held on the token
Data held on the token
All token transactions are recorded transparently on the blockchain that provides a digital audit trail, reducing the need for reconciliations and enabling process automation.
HI THERE
Hover over a trait for details
Effective teams accomplish more as a collective than as individual leaders