PEAKDEFI - Decentralized Performance-based Asset Management Fund

Nick Sawinyh on 02 Feb 2021

Sergej told us PEAKDEFI backstory and how revolution against traditional financial markets going, and what’s the goal for PEAKDEFI Protocol in 2021.

Disclosure: This article was sponsored by PEAKDEFI.

Hello! What’s your background, and what are you working on?

My name is Sergej Heck, and I am the founder of PEAKDEFI. I started my professional life as a graduate engineer at a large German automotive company and at the same time I started to work in online marketing. In 2015 I was able to focus completely on online marketing and since then I have also been involved with cryptocurrencies. Today I run a crypto consulting company, two German-speaking crypto magazines (Blockchain-Hero and Coinkurier), and now launched the PEAKDEFI Protocol.

Over the years as a CEO of crypto companies, I have been able to make some contacts and find out the everyday problems of the crypto community. This ultimately led me to launch PEAKDEFI Protocol. Because the traditional finance market is outdated, we need a new generation: faster, more transparent, and trustless solutions. PEAKDEFI is a decentralized, performance-based asset management fund, created to connect investors and asset managers for capital growth.

The Idea of the PEAKDEFI fund is the idea of a mutual fund, which is basically pooling your money with the money of other investors and investing it in a portfolio of different assets. The PEAKDEFI fund is a decentralized fund, programmed as a smart contract on the Ethereum blockchain, managed by different managers in a decentralized, permissionless, and smart way to get the best outcome for everybody involved. Investors can invest in the contract and buy a share of the PEAKDEFI fund, whereas managers can participate in on-chain trading with the fund’s capital.

What’s PEAKDEFI backstory?

As I mentioned above, I have been working with other crypto companies for a number of years now and some of those have been investment firms as well. Unfortunately, I had to observe again and again how most of the companies lost their funds, often due to human errors and actions in the absence of transparency. This gave me the idea to build a DeFi fund that is completely decentralized and automated, without other people or entities having control and access to the assets.

At the same time, the traditional hedge fund market is huge and outdated and a DeFi fund simply has much more advantages over a traditional hedge fund:

  • You have no middlemen or entity between that has the control of the fund
  • You have less fees because of full automation of smart contracts. So you have no bureaucracy or management that you need to pay for
  • The smart contract works 24/7, borderlessly
  • Easy and fast onboarding due to less obstacles

What went into building PEAKDEFI?

Development for the PEAKDEFI platform began in April 2020 and we went live on the mainnet in December 2020. So it took around 9 months to fully develop the platform. During the development, we have seen more and more capital flowing into the market and specifically the DeFi niche as well. That gave us the motivation to be on the right track. When we started developing the platform, we first wanted to build several funds in parallel and let the investor decide where to invest. However, a study on our part showed that investors only want to invest in one fund, naturally the one with the best performance, and that further fund offerings only confuse and disturb the investor. So we finally came to the idea of ONE global performance-based DeFi fund, because we also believe that sometimes less is more.

The PEAKDEFI protocol is built on the Ethereum blockchain (Solidity language) and we integrated proven protocols like 1inch for exchanging assets and trading basic orders, Uniswap as a decentralized price oracle, Kyber Network as liquidity provider, and Compound for leveraging trading orders.

To ensure security for PEAKDEFI Fund, we have hired one of the most well-known blockchain security companies in the world to review and audit our PEAKDEFI Fund Smart Contract. None other than Quantstamp then agreed to review our code and audit it. The full audit report can be viewed here.

Before going live, we tested and reviewed all the features and API interfaces on the Rinkeby Testnet several times to make sure everything was working properly. Also we tested two contracts on mainnet before we finally went live with final deployed smart contracts.

What’s your business model?

In addition to the PEAKDEFI platform, we also have a PEAKDEFI Ethereum Wallet app, which is a native Ethereum wallet. However, we do not earn any money with these two DeFi products. With the DeFi Fund we only take a fee of 0.1% of the AUM every 60 days as a developer fee. The good thing about the whole thing is that we don’t have to make money with the PEAKDEFI protocol, nor with the PEAKDEFI Ethereum Wallet. Because as the third pillar in the PEAK ecosystem, there is also an education and software company called MarketPeak. This is a continuing education company where we train newbies and crypto beginners and advise them on everyday crypto. In order to receive training there, a fee must be paid, which currently provides the funding basis for the entire PEAK ecosystem. (By the way, the demand for crypto training has increased considerably since the beginning of the pandemic).

Our competitors are other DeFi funds such as Tokensets or Melonport. We differ essentially in our positioning on ONE global DeFi fund that can be managed by different traders through a performance-based automation. This makes investor onboarding much easier because you don’t have to decide between multiple funds. On top of that, we have integrated an affiliate reward system into the Smart Contract, whereby PEAKDEFI users are additionally incentivized when they recommend the platform. As a result, within a month of launch, over half a million USDC have already been invested and over 19.45 million PEAK have been staked with a total of over 2,200 protocol users and over 5,900 PEAK holders.

Our target group are of course crypto investors but in the long run also more and more investors outside the crypto market.

What’s your position on the regulatory landscape today?

I wish there would be more certainty and clarity on the subject of regulations. If we look at the current regulations regarding service providers in the financial market, we see a big difference between custodial and non-custodial providers.

If you operate a custodial service provider, which actually holds the assets of clients, there are many high regulatory hurdles to overcome. We at PEAKDEFI, as well as many other DeFi projects, have decided to go the non-custodial route and handle the whole project with smart contracts. For us, this makes it easier to work and get regulatory buy-in because we know exactly what does NOT apply to us.

However, due to the general non-classification and confusion regarding the DeFi industry, it is hard to tell exactly what applies to us. Regulators are currently unsure of exactly how to classify and regulate DeFi. And this uncertainty sometimes makes it a bit difficult to act and work in a preventive and at the same time innovative way. We hope that with the growing popularity of the DeFi industry, the interest of the regulators will be awakened and they will publish simple but meaningful regulations, which will give the whole industry a little more security and certainty.

What are your goals for the future?

The goal for this year is to become one of the biggest DeFi funds with at least 20,000 users on the PEAKDEFI Protocol, that would be a 10x growth from now (i.e. a fund investment of 50 Million USDC AUM and 100 Million PEAK token staked).

These goals are of course ambitious, but that gives us the daily motivation to give more than 100 percent and to move the platform forward. On the one hand, we will try to get some crypto affiliates on board and also invest more in PR. Two other milestones for the PEAKDEFI Protocol are also the integration of a so-called “protection staking” to cover trading losses and the integration of NFT funds.

What are your future thoughts for the DeFi market?

DeFi is just amazing! I mean we are starting a financial revolution where the traditional financial market, by printing money, loses a lot of trust and the solution for that is decentralized finance. It has much more advantages like transparency, faster transactions, less fees, and works trustlessly 24/7. I believe the DeFi market will be the largest share of cryptocurrencies in the future.

Where can we go to learn more?

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About the author
Nick Sawinyh
Nick Sawinyh is an LA-based crypto entrepreneur. After having spent over four years in the blockchain industry, Nick founded DeFiprime in 2019, with the idea to provide information about emerging DeFi ecosystem. He owns modest amounts of various cryptocurrencies.

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