Fund redemption is the process by which an investor liquidates their holdings in an investment fund, receiving their capital back. This typically involves selling units or shares back to the fund issuer at the prevailing net asset value. The process can vary depending on the fund type, liquidity of underlying assets, and redemption policies, potentially involving notice periods or fees. It represents the investor’s ability to access their invested capital.
Context
In the digital asset space, fund redemption is a critical consideration for investment vehicles like crypto exchange-traded funds or managed crypto funds. News often covers redemption mechanisms, particularly during periods of market volatility, as they relate to investor liquidity and fund stability. Debates may concern the speed and efficiency of redemptions for funds holding less liquid digital assets.
Tokenizing institutional funds on a high-throughput Layer-1 network establishes a compliant, composable on-chain infrastructure for capital efficiency.
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