Jenna Zenk, Co-founder of Avantgarde Finance asks Chris Manessis, CIO at Moonchain Capital, about his experience of setting up a Melon fund at DeFi Summit London.

Randomly chosen volunteers at DeFiSummit London were able to set up a Melon fund in about 15minutes…

Jenna Zenk: So, a couple of weeks ago at the DeFi Summit London, you took part in a live demo of the Melon Protocol at a session hosted by my colleague (Mona El Isa) and I to launch Avantgarde Finance Ltd, which is planning to continue the development of the Melon protocol. What did the set-up involve from your perspective?

Chris Manessis: Yes, I was picked out of the audience to set up a Melon Fund. For me, the set-up process was very straightforward (even under pressure!) and is fundamentally broken up into two parts. The first part (wallet creation) is a process that is very similar to setting up Metamask or a hard wallet like Ledger or Trezor. Crypto-natives will have no issues with this segment. The second part (fund creation) is also quite straight forward, except there are a few “fund terms” which non-investment individuals might not necessarily understand and therefore will require them to do some initial research. For example, when choosing the fund parameters I had to decide which DEXs to use, the asset universe, the maximum number of positions, AML/KYC user whitelist etc. Otherwise, the process of creating and deploying the fund through smart-contracts on Melon is self-explanatory. For a native crypto user, I think setting up a Melon-based fund is really easy.

Jenna Zenk: What do you think are the particular benefits and advantages of using Melon?

Chris Manessis: It is no secret that setting up a fund and finding a custodian is a very costly, lengthy process — especially for Crypto. Melon aims to reduce these pain points massively, and I think the first iteration does so effectively.

Jenna Zenk: And what in your opinion needs to improve for more fund managers to use Melon?

Chris: UI, UI, UI. The current UI is workable but could be improved. For someone non-native to crypto, the process of setting up a Melon fund might prove quite difficult. And although the management system is clean, the design feels a bit outdated and reminds me of a legacy financial application (e-banking in 2006). Also, I would strongly recommend adding some additional UI explanations to facilitate the set-up process. Once the fund is set up, it would also be great to get some graphs and charts to illustrate holdings, fund performance, investor list, etc..(like the main dashboard and Melon Monitoring Tool). I also found that the order books could be clearer and are generally a little laggy. Other things to add potentially are to show holding weight in percentage and fund ranking. I think the UI for Ash Finance is really great and would love the fund management system on Melon to have a similar feel. It might be good to add a news section or social media section too.

Jenna: and what would we need to do before you (or Moonchain) would be prepared to set up an on-chain Melon fund for your investors?

Chris: I think the main issues at the moment in using Melon to set-up a crypto fund is a lack of liquidity (ERC20 DEX’s only) and regulatory uncertainty around the ‘legitimacy’ of the platform as a fund management system. So, before setting up a Melon fund, I would need to see a fully compliant KYC suite for investors, validation of Melon by our local regulator (which for us is FINMA) and increased liquidity on DEXs. Also, the current fund AUM hard cap is too small, and needs to increase to a more significant size — for example over 1m — although I understand that you’ll be increasing this in the months to come.

Jenna: Lastly, what’s your message to regulators and other players in the DeFi space?

Chris: I think Melon’s fund management platform is a great use case to show how leveraging smart-contracts and the blockchain can facilitate and improve legacy financial frameworks with significant pain points. Even though there are still some regulatory issues which need to be resolved, we need to continue iterating Melon’s technology and platform so that one day it can set the standard for crypto fund management. Eventually, I believe regulators will view smart-contracts and blockchain-based technologies as an extraordinarily transparent and efficient tool for managing and regulating financial infrastructures.

Jenna: Thank you so much Chris — and we hope you continue to be a champion for Melon in the future!