One of India’s largest Cryptocurrency Exchange WazirX announced the launch of STF – Smart Token Funds earlier today. WazirX users will be able to create Mutual-Fund style funds with Crypto assets, which other users can then invest in.
WazirX exchange will soon launch a “Smart Token Fund” abbreviated as STF on its platform. It was announced by the CEO and co-founder of the exchange Nischal Shetty on Wednesday via twitter.
The STF, in simple words, is like a mutual fund, and an STF trader is a portfolio manager who other users can invest their cryptocurrencies with. Once a user choses the STF to invest in, the STF trader will use the funds to trade, and generate profit for the user.
STF trader will earn a small commission out of the profit for managing the users’ portfolio. The payout structure is not yet announced.
For fund safety, the STF trader will not be allowed to withdraw any funds from his or her account.
How to Invest in STF?
WazirX has released a four-step guide for users to invest in any STF or with any STF trader.
Step 1: Choose the right STF for you. You can go through the list of Smart Token Funds (STF), analyse the STF trader’s activity and background, fund performance, cryptocurrency holdings, and more.
Step 2: Buy Smart Token with your cryptocurrency. If you like any STF, you can buy the Smart Token with your cryptocurrency and allow the STF Trader to manage your cryptocurrency portfolio.
Step 3: The STF Trader will trade with your cryptocurrency. The STF Trader will use their acumen, and manage your cryptocurrency portfolio like their own. You will be able to track the growth of your cryptocurrency portfolio.
Step 4: You can sell Smart Tokens and withdraw your cryptocurrency. If you want to exit, you can sell the Smart Tokens anytime you want, and withdraw your cryptocurrency.
Risks and Mitigation
Cryptocurrency investment and risks are two sides of the same coin. The highly volatile nature of Crypto assets can bring in huge returns but can also take away the investment in short durations.
Hence, a user can feel safer to allow good traders to trade their funds for them. However, not everyone can make the same kind of profit. Hence, the user can choose the STF based on their past performances, their backgrounds, their activities. Thereby mitigating the risk of loss to some extent.
Recently WazirX opened its gate to other countries as well, so the users as well as STF traders you may follow can be from anywhere in the world. The application to become an STF trader is available on the website.
What do you think about the new STF or Crypto funds from WazirX? Would you invest with an STF trader? Let us know your views in the comments below.