CoinMarketCap takes a deep dive into a new project that is looking to improve access to ETFs.
Investing in crypto and DeFi can be overwhelming and costly. With high volatility and high transaction fees, creating a balanced portfolio of assets seems to be reserved for those with experience and high net-worth.
Hord is aiming to solve this by building a social-investing ETF platform on Ethereum.
What Is Hord (HORD)?
Hord.app is a new DeFi platform on Ethereum that looks to provide crypto investors of all sizes and experience levels with an ETF solution. The platform allows experienced traders, key opinion leaders (KOLs) and venture capitalists (VCs) to monetize and share their strategies by creating unique champion pools, which users can follow 1:1 by acquiring ETF tokens that mirror the portfolio.
At the same time, Hord offers affordable widespread exposure to crypto-assets with DAO and index-based ETFs.
By offering a range of tokenized solutions for crypto investors of every kind, Hord hopes to provide a first-of-its-kind social DeFi platform. Hord’s champion concept makes for a potentially useful proposition for both experienced and inexperienced traders — since it takes much of the effort out of identifying and executing profitable trading opportunities.
The platform currently has over 30 champions signed up, including a range of KOLs, investment firms and well-known traders. These champions offer less experienced traders a way to profit from the knowledge and experience of more seasoned players.In addition to these actively managed ETFs, Hord offers a number of passive, index-based ETFs, like DeFi Pulse, for example. These tokenized indices can be traded and redeemed for their underlying value in ETH at any time.
With the platform comes the HORD token, an ERC-20 asset that was launched in April 2021, shortly following a strongholder offering (SHO) hosted by DAO Maker. The HORD token can be used to stake on proposals, gain priority access to pools, unlock discounted fees on the platform and more.
How Does Hord Work?
Hord’s champion hPools (ETFs) work by leveraging two smart contracts. On one end, there is the champion contract, where champions put in funds and manage the portfolio. On the other end, there is the mirror contract, where followers put in funds. The mirror contract mirrors every trade that happens within the champion contract one to one. When users submit funds to the mirror contract they get an ERC-20 token that is pegged to the value of a specific hPool.
As allocation to these pools is limited, users can farm champion NFT tickets to ensure allocation to the champion’s hPool. These NFT tickets are ERC-1155 tokens and can be traded on platforms like OpenSea.
Once a pool is initiated and filled it will not be possible for new users to join in. Users that missed the boat can acquire tokens from other users that were able to secure an allocation. Trading of hPool tokens will happen on the Hord DEX, where HORD tokens are used for transaction fees — part of which will be burned to reduce the circulating supply.
Another big part of Hord is the passively managed ETFs, which can be thought of like sector ETFs. hPool tokens of these ETFs represent the value of the underlying assets of a certain sector within the cryptocurrency industry. One example industry could be the exchange sector, where the ETF holds different exchange tokens in a certain ratio that represents the market capitalizations of these assets.
What Makes Hord Unique?
Hord.app has a number of unique features that make it a potentially attractive solution for a variety of crypto investors, traders and enthusiasts. A few of them are highlighted here:
Active + passive ETFs
Hord does not limit itself to one type of ETF. Rather the platform will allow practically any type of ETF to be created, ranging from champion-led to DAO-governed to index-based. This feature is unique in the industry, helping Hord target a diverse user demographic.
Champion NFT tickets
By limiting the size of hPools, Hord ensures that incentives are aligned while creating utility for the token and volume for the DEX at the same time. This concept is unique to Hord.
Hord DEX
hPool trading will work on Hord’s proprietary order book-based DEX, which is used to ensure liquidity for every hPool. With potentially hundreds of pools, this is an important feature, since providing liquidity on automated market makers (AMMs) could cause some pools to suffer from low liquidity.
Pooled investing
The social aspect of pooled investing plays a big role on Hord.app. By being in the same boat as others and discussing strategies, users will be able to engage other users and investors, and may feel more comfortable with the volatility that crypto markets are known for.
Not just crypto
Though it will start out supporting crypto assets, Hord aims to eventually include all sorts of assets, like tokenized stocks and even things like real estate.
HORD Token
The HORD token sits at the heart of the Hord platform. This deflationary asset will comprise at least 1% of every champion hPool. The token will also be staked to gain priority access to pools, and vote for governance decisions that need to be made. As we previously touched on, all fees on the platform can be paid in HORD, a chunk of which will be permanently burned.
What Are ETFs?
Exchange traded funds (ETFs) are a type of exchange traded asset that enable investors to gain exposure to a basket of assets using a single investment product. These are typically used for securities like stocks and bonds, but are becoming increasingly popular as vehicles for baskets of crypto assets.
ETFs are extremely popular in the traditional financial world, with a large fraction of all stocks being inside an ETF. If this trend continues in crypto, the market potential for Hord could be significant.
Hord looks to leverage these benefits to create a platform that both experienced and inexperienced investors can use to gain access to diverse crypto funds, managed by a range of vetted champions.
For a more in-depth look at ETFs and their uses, see our full overview of the subject.
This article contains links to third-party websites or other content for information purposes only (“Third-Party Sites”). The Third-Party Sites are not under the control of CoinMarketCap, and CoinMarketCap is not responsible for the content of any Third-Party Site, including without limitation any link contained in a Third-Party Site, or any changes or updates to a Third-Party Site. CoinMarketCap is providing these links to you only as a convenience, and the inclusion of any link does not imply endorsement, approval or recommendation by CoinMarketCap of the site or any association with its operators. This article is intended to be used and must be used for informational purposes only. It is important to do your own research and analysis before making any material decisions related to any of the products or services described. This article is not intended as, and shall not be construed as, financial advice. The views and opinions expressed in this article are the author’s [company’s] own and do not necessarily reflect those of CoinMarketCap.
