Using OpenPool to Deliver Institutional-Grade Investment Reporting to Definitive’s Sophisticated Client Base

An Introduction to Definitive

Definitive is leading the charge towards institutional adoption of DeFi yield strategies and trading execution. Definitive is an execution platform for DeFi, offering non-custodial smart contracts and automation services across leading DeFi protocols. They seek to deliver not only superior yields, but reduce friction and overhead for investors who want DeFi exposure without the headaches of navigating multiple UXes and non-existent trading support. Definitive eliminates the crude and tedious UIs of trading in DeFi while offering support that is table-stakes in TradFi, but lacking in Web3 such as optimal trade execution, automated position management, detailed P&L reporting, and auditability of trading activity. 

Definitive’s Reporting Challenge

Definitive recognized that winning big clients required going beyond delivering attractive returns. Trading P&L and robust reporting were tantamount in building trust with larger clients that demand the infrastructure to meet the high standards of their own customers. Most existing DeFi data providers fall short - lacking granularity beyond current balances and published yields. Definitive sought a more robust P&L reporting solution that could scale with its platform.

The OpenPool Solution

OpenPool’s reporting technology involves ingesting on and off-chain datastreams to automate workflows for generating P&L and financial reporting. By translating smart contract events and blockchain activity into conventional financial reporting metrics, OpenPool is able to provide tailored and robust P&L reporting for Definitive’s vaults. 

Conventional portfolio trackers and DeFi data providers often prioritize protocol coverage over depth of data. Furthermore, accurately capturing DeFi protocol activity is a constant battle due to non-standard protocol structures and nuances in DeFi features offered by each protocol (for example, offering rewards in the protocol’s native token vs. another type of income stream).  OpenPool is able to go beyond current protocol balances to dissect each position’s principal balance versus rewards income accrued within each protocol. 

Impact & Results

Through this partnership, Definitive and OpenPool are paving the way for greater adoption of DeFi by traditional asset managers and institutional investors. Compare the Definitive/OpenPool operating model with a traditional hedge fund. At a typical hedge fund, traders place trade orders through systems such as Eze that connect to various trading counterparties. Post-trade, the operations team reconciles trades with prime brokers, ensuring accurate capture of executed transactions. This reconciliation process can be complex, involving communication with counterparties and resolving discrepancies. Once reconciled, trades and positions are fed into an accounting system such as Advent Geneva for further processing. Fund accountants and administrators (key hedge fund service provider)  play a crucial role as well. They analyze daily trading activity, providing oversight and sometimes manually accounting for factors like market movements, dividends, and corporate actions. 

Smart contract technology revolutionizes this cumbersome workflow. By automating the execution and recording of DeFi trades using smart contract events, Definitive enables non-custodial, transparent and auditable trading services. OpenPool then ingests smart contract and blockchain activity to automate P&L calculations for Definitive vaults.  Learn more about the Definitive platform and their mission here.

The Web3 operating model enables unparalleled efficiency and transparency in contrast to a typical traditional asset manager, fundamentally transforming the landscape for investment management. The level of sophistication in Definitive’s platform, supported by OpenPool’s powerful reporting engine, are foundational to our shared mission to grow Web3 adoption and realize a new era of financial innovation enabled by blockchain technology.