Durafi Protocol
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Durafi Protocol

Why Durafi Fund Tokens Are Better than Crypto Index Funds

At Durafi we’ve created a new class of tradable cryptocurrency indices called “Durafi Fund Tokens” (DFTs), with the core belief that traders should be able to easily trade in and out of diversified crypto index products with maximum flexibility and minimum costs.

The most important distinction of DFTs is that they are crypto index derivatives and not crypto index funds. This derivatives distinction is significant because every time a trader buys or sells our DFTs, we aren’t burdened with the high gas fees that would otherwise be required to transact in the underlying basket of cryptocurrencies that our DFTs represent.

This is in contrast to a crypto index fund that typically uses the invested capital to buy the underlying constituents of its index. Buying the underlying constituents incurs substantially higher gas & transaction costs than our DFTs, due to the index fund’s need to make multiple sub-transactions compared to only a single required transaction when a DFT is bought or sold on our decentralized exchange. DFT cost savings are compounded the more often you trade – which matters a lot for professional traders.

Durafi Fund Tokens vs. Crypto Index Funds

Moreover, DFTs are more versatile; enabling traders a multitude of trading strategies using active trading, long/shorts, and employing leverage. With that, DFTs settle much faster than a typical investment into or redemption out of a crypto index fund.

Combined with our decentralized exchange’s hybrid AMM/Orderbook engine, DFTs empower high-frequency trading opportunities that are impossible with index funds.

Finally, DFTs are useful for everyday traders who want to easily trade views on different crypto trends, or hedge out market risk for certain sector/trend risks from their portfolio.

In summary:

  • DFTs are completely different crypto index funds because they are crypto index derivatives.
  • DFTs have dramatically lower transaction costs than most index funds because they don’t require multiple sub-transaction in their indices’ underlying constituents.
  • DFTs allow traders to go long or short, with or without leverage.
  • DFTs trade on our decentralized exchange with a hybrid AMM/Orderbook optimized for efficient, high-speed index derivatives trading.
  • The above factors make them dramatically better for traders than crypto index funds, both in terms of lower all-in trading costs and gas fees and also dramatically more flexibility for trading strategies.

The Durafi community will guide the proposal and launch of new DFT indices on the Durafi platform. Want to help guide the creation of new indices? Feel free to connect with us below.

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Durafi is a decentralized exchange specifically designed for the active trading of index derivatives.

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Vincent Fernando, CFA

Vincent Fernando, CFA

Co-founder, Durafi

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