ADIF
Arkenstone DeFi Index Fund (ADIF | $ADIF)
April 1, 2021
Exchange-traded fund (Set) (Index) (Indice) (cETF) (The Fund) token are traded on the following marketplaces: Tokensets.com
The Securities and Exchange Commission (SEC) has not approved or disapproved these securities or passed upon the adequacy of this prospectus. The Fund’s statutory Prospectus and Statement of Additional Information dated April 1, 2021 as may be amended or supplemented, are incorporated into and made part of this Summary Prospectus by reference.Investment Objective
The Fund seeks to track the performance of a benchmark index that measures the investment return of large-capitalization and medium-capitalization decentralized finance applications and tokens.
Fees and Expenses
The following table describes the fees and expenses you may pay if you buy and hold cETF Tokens of the Arkenstone DeFi Index Fund.
Tokenholder Fees
Transaction Fee on Purchases and Sales
Varys with Gas prices
Transaction Fee on Conversion to Tokens
Varys with Gas prices
Annual cETF (Set) Operating Expenses (ADIF | $ADIF)
Streaming fees
0.85%
Insurance fees
With release of governance
Portfolio Turnover
The Fund or Arkenstone DeFi Index Fund pays transaction costs, such as commissions to marketplaces, when buying and selling tokens or DApps (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs. These costs, which are not reflected in annual fund operating expenses or in the previous expense example, reduce the Fund’s performance.
Principal Investment Strategies
The Fund employs an indexing investment approach designed to track the performance of the largest weighted percentage possible for the Decentralized Finance cryptocurrency market or DeFi market, a calculation similar to the widely recognized benchmark of U.S. stock market performance, the S&P 500. The Fund attempts to replicate the target DeFi market by investing all, or substantially all, of its assets in the token that make up the DeFi market, holding each token in approximately the same proportion as its weighting in the DeFi market.
Principal Risks
An investment in the Fund could lose money over short or long periods of time. You should expect the Fund’s share price and total return to fluctuate within a wide range. The Fund is subject to the following risks, which could affect the Fund’s performance:
- DeFi market risk, which is the chance that tokens prices overall will decline. DeFi markets tend to move erratically, with periods of rising prices and periods of falling prices. The Fund’s target market tracks a subset of the DeFi token market, which could cause the Fund to perform differently from the overall DeFi token market. In addition, the Fund’s target market may, at times, become focused in stocks of a particular holding sector, which would subject the Fund to proportionately higher exposure to the risks of that sector.
- Investment style risk, which is the chance that returns from large-capitalization and medium-capitalization tokens will trail returns from the overall DeFi token market. Large-cap tokens tend to go through cycles of doing better—or worse—than other segments of the DeFi token market or the DeFi market in general. These periods have, in the past, lasted for as long as several months.
Because cETF tokens are traded on an exchange, they are subject to additional risks:
- The Fund’s cETF tokens are listed for trading on Tokensets.com and are bought and sold on the secondary marketplaces at market prices. Although it is expected that the market price of an cETF tokens typically will approximate its net asset value (NAV), there may be times when the market price and the NAV differ significantly. Thus, you may pay more or less than NAV when you buy cETF Shares on the secondary markets, and you may receive more or less than NAV when you sell those Tokens
- Although the Fund’s cETF Tokens are listed for trading on Tokensets.com, it is possible that an active trading market may not be maintained.
- Trading of the Fund’s cETF Tokens may be halted by the activation of individual or market-wide trading halts (which halt trading for a specific period of time when the price of a particular security or overall market prices decline by a specified percentage). Trading of the Fund’s cETF Tokens may also be halted if (1) the Tokens are delisted from Tokensets.com without first being listed on another exchange / marketplace or (2) Tokensets.com officials determine that such action is appropriate in the interest of a fair and orderly market or for the protection of investors.
An investment in the Fund is not a deposit of a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.Token Inclusion Criteria
The Arkenstone DeFi Index Fund has a collection of criteria composed of four dimensions. Two dimensions are used to evaluate the token’s characteristics, one dimension is used to assess the project’s characteristics, and one is used to evaluate the protocol’s characteristics. The inclusion criteria are the basis to select what tokens will be included in the index.
Token’s Descriptive Characteristics
- The token must be available on the Ethereum blockchain.
- The token must be associated with a decentralized finance protocol or dAPP listed on CoinMarketCap and/or CoinGecko.
- The token must not be considered a security by the corresponding authorities across different jurisdictions.
- The token must be a bearer instrument. None of the following will be included in the index:
- Wrapped tokens.
- Tokenized derivatives.
- Synthetic assets.
- Tokens that are tied to physical assets.
- Tokens that represent claims on other tokens.
Token’s Supply Characteristics
- It must be possible to reasonably predict the token’s supply over the next five years.
- At least 5% of the five year supply must be currently circulating.
- The token’s economics must not have locking, minting or other patterns that would significantly disadvantage passive holders.
Project’s Traction Characteristics
- The project must be widely considered to be building a useful protocol or product. Projects focused on competitive trading/holding, having Ponzi characteristics, or projects that exist primarily for entertainment, will not be included.
- The project’s protocol must have significant usage.
- The protocol or product must have been launched at least 180 days before being able to qualify to be included in the index.
- The protocol or project must not be insolvent.
Protocol’s User Safety Characteristics
- Security professionals must have reviewed the protocol to determine that security best practices have been followed to maintain user assets safe under different circumstances.Alternatively, the protocol must have been operating long enough to create a consensus about its safety in the decentralized finance community.
- In the event of a safety incident, the team must have responded promptly and addressed the incident responsibly in the aftermath, providing users of the protocol with a reliable solution and the decentralized finance community with adequate documentation to provide transparency about the incident.
- The selected tokens must have sufficient liquidity across a variety of trading platforms.
Last modified 9mo ago