A Preview of Phuture

DISCLAIMERS:

This article is being written as a part of the “Tell the world why you love Phuture” task on Layer3. The author has no financial stake in this protocol at the time of writing, but may be rewarded 100 $PHTR (worth approximately $299 at the time of publication) in exchange for completing this Layer3 task.

This article is not meant to advise any investments, purchases, or other financial decisions.

TERMS AND DEFINITIONS

In order to help readers better comprehend this article, I’ll first provide a quick overview of some more traditional financial concepts:

— Index investing is a passive investment technique in which investors seek to match the returns of a specific index.
— One example of an index is the S&P 500, which is a weighted basket of 500 large companies traded on US stock exchanges.
— Investors tend to gain exposure to these indices through index funds, which are typically either sold as mutual funds or ETFs (exchange traded funds).
— Index investing is a massive industry, with index funds estimated to hold 45% of the value in the U.S. stock market as of March 2019.

PHUTURE

Today I discovered an Ethereum DeFi protocol known as “Phuture”. Their goal is to facilitate the creation of, and investment in, what their documentation refers to as “token based passive investment strategies”.

Phuture expects that token-based index funds, specifically those representing sectors of the crypto industry, will become an increasingly desired investment opportunity as the DeFi economy matures. While they predict that passive strategies will hold widespread appeal (just as they do in traditional finance), Phuture also acknowledges that the volatility of DeFi necessitates support for more active management as well.

Overall, they want to provide a comprehensive set of tools enabling users to create their own indices or to invest in existing indices created by other community members. With an open design philosophy, they hope to encourage innovation while also keeping the experience intuitive for new users.

Indices created on Phuture will be able to support any ERC-20 asset, provided that it has been whitelisted. One exciting implication of this broad support, alongside future development of equity-linked tokens by other protocols, is that a Phuture index could give its investors simultaneous exposure to both traditional and decentralized finance.

COMING SOON

As I write this article, the Phuture protocol is still in development and is not yet available to the public. Users can submit their email address within this form to receive automatic notifications when the dapp is launched. Additionally, a list of links to the Phuture social media are available here.

CONCLUSION

Index funds are an incredibly useful and important part of traditional finance, and thanks to Phuture we can now expect similar investment opportunities within the world of DeFi. I am excited to see this technology being built, and I’m quite certain that I will try out this protocol when it becomes available.

This article is by no means comprehensive. The information and opinions that I have presented above are only a small overview of the Phuture protocol. If you would like to learn more, I highly recommend reading their blog on Medium and their official documentation. In the docs you can find further details about the protocol itself, including their “Smart Rebalancing” and “Asset Optimization” features which I find especially interesting. They also have a unique yield-bearing governance token, $ePHTR, which you can read more about here.

The Phuture smart contracts are currently private. According to this page of their documentation, the code will be made public following completion of an audit in the near future. If you are reading this article following the public release of the Phuture application, I would encourage you to seek out and review this audit before participating (as is standard when investing in new decentralized finance projects).

Upon the release of their application, Phuture will also publish a step-by-step tutorial for the index creation process. It is not available at the time that I am writing this article, but it will eventually be available here.