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Funds Architecture

DAMM is systems-driven, and always will be. The DAMM Toolkit is the stack we have built over the years to deploy and manage capital autonomously onchain, while keeping asset management non-custodial.

The toolkit combines the benefits of self-custody with the reach of DeFi, under strict security standards. We built some components in house. Others come from industry peers or were built with partners.

How the pieces fit​

Every DAMM fund has three layers: a vault that handles investors, Safes that hold the capital, and a permission layer that decides what operators can do.

  • The Lagoon Deposit Module handles deposits, redemptions and share pricing.
  • The fund's Safe holds the assets. Its signers keep control.
  • The Zodiac Roles Module lets operators and bots act for the Safe, but only within scoped permissions.

Fund structures​

Funds can be structured in different ways to balance risk, isolate strategies and run several strategies at once.

Mother-child structures​

One Safe (the mother) can own several sub-Safes (the children). Each child runs its own strategy. This gives:

  • risk isolation between strategies;
  • a clear separation of responsibilities.

The strategies shown are illustrative. In DAMM's Algo funds today, each child Safe runs one isolated Uniswap LP pair.

Fund-to-fund structures​

A fund can also deposit into another fund and receive its shares in return. For example, a high-risk fund focused on long-tail assets could park part of its capital in a low-risk stablecoin fund, for risk management or short-term liquidity.

DAMM uses this today. DAMMbtc, for example, allocates into DAMMbtcAlgo, an internal execution fund that charges no fees of its own.

Mother-child and fund-to-fund structures can be combined to build complex, multi-strategy funds.

Components​

The following pages cover each part of the DAMM Toolkit and how they connect: