F* Custody
OPEN FUND CUSTODY
Sole USDC custody + K-of-N signed NAV + KYC-gated transfer. The protocol holds no private keys; isolation and withdrawal rules are all on-chain.
CONTRACTS
FundVaultShareTokenNAVOracleKYCRegistry
F* PROTOCOL
Protocol
Protocol
F* is an open-source, decentralised on-chain asset-allocation protocol — providing custody, NAV oracle, daily settlement, dividend distribution, and a strategy hub for any team building an on-chain fund. This page is the protocol-level overview: principles, architecture, governance, and the path for developer contributions.
— PROTOCOL PRINCIPLES
Protocol Principles
“Open allocation. Shared chassis. Sized to grow.”
Financial primitives should not be rewritten by every fund. F* takes the capital side of fund operations — custody, pricing, settlement, dividend, compliance — and ships it as a set of open-source, auditable, governable contracts. Any team can launch an on-chain fund on top of F* without rebuilding these primitives. Differentiation lives in the pluggable ISettlementPolicy: QDFI mounts ThreePoolPolicy for three-pool dividend; others can mount KellyPolicy (reference) or contribute their own. Shared chassis + differentiated strategy — that is the engineering aesthetic this protocol means to carry.
04 — PROTOCOL ARCHITECTURE
Protocol Architecture (contract view)
Contracts and status backing the five modules above
F* *is* this on-chain protocol — an open-source set of Solidity contracts (the fund-vault generic layer: custody, NAV oracle, daily settlement, dividend distribution, KYC, circuit breakers, multisig governance) plus a strategy hub composed of pluggable `ISettlementPolicy` implementations. Every fund that integrates F* mounts a Policy describing its own philosophy: QDFI mounts ThreePoolPolicy for three-pool dividend; KellyPolicy ships built-in as a reference implementation.
FUNDVAULT
FundVault · Custody
Sole USDC custody · idle / deployed accounting · withdrawals dual-gated by AllocationManager and KellyPolicy
K-OF-N NAV ORACLE
NAVOracle
K-of-N signed NAV · auto-pause on ±X% deviation · T+1 on-chain price
DAILY TICK SETTLEMENT
DailyTick · Settlement
Daily trigger · calls the mounted fund's ISettlementPolicy.settle() · variable dividend, NAV retention and reserve injection are decided by the Policy
STRATEGY HUB
Strategy Hub · Policy registry
Pluggable ISettlementPolicy interface · published: ThreePoolPolicy (QDFI), KellyPolicy (reference) · third parties can submit new Policies
MERKLE DIVIDEND
DividendManager
Profitable-day Merkle root published on-chain · holders call claim(proof) · USDC straight to wallet
K-OF-N MULTISIG
FundMultisig · Governance
Policy swap, parameter changes, emergency pause · K-of-N multisig governance · tiered guardian circuit breaker (Timelock upgrade delay is a mainnet plan)
STABLE CORE · SHIPPED + FROZEN
- FundVault / ShareToken / NAVOracle / AllocationManager
- DividendManager / DailyTick / ReserveFund
- KYCRegistry / EmergencyController
- FundMultisig (Timelock = mainnet plan)
POLICY HUB · POLICY IMPLEMENTATIONS
- ThreePoolPolicy — QDFI three-pool dividend (6% fixed + 30/60/10 split) · mounted
- KellyPolicy — fractional Kelly allocation (reference implementation, not co-deployed)
- Third parties may contribute custom Policies (open PR / governance review / on-chain registration)
- ISettlementPolicy interface is stable · Policy swap requires Multisig governance
TESTNET DEPLOYMENT
Arbitrum Sepolia · chainId 421614 · fund-vault generic layer + ThreePoolPolicy (mounted)
STATUS
End-to-end dry-run verified (2026-05-27) · QDFI live on testnet · mainnet deployment pending third-party audit
The protocol holds no user assets and takes no protocol fee — it is a set of open-source financial primitives shared across multiple funds. Integrating means spending engineering time on strategy alpha instead of reinventing financial plumbing, while inheriting the network effects of multi-fund joint audit.
02 — PROTOCOL MODULES
Five Protocol Modules
F* Custody · Strategy Hub · Allocation Engine · Execution Layer · Risk Layer
F* is composed of five modules with clear responsibilities. Each maps to a group of open-source contracts; integrating funds combine them as their strategy philosophy requires, without rewriting the underlying primitives.
F* Strategy Hub
STRATEGY HUB
Pluggable ISettlementPolicy registry — each fund mounts a Policy describing its allocation and dividend logic. Any team may fork and submit new Policies.
CONTRACTS
ISettlementPolicyThreePoolPolicyKellyPolicyVendor Policies
F* Allocation Engine
ALLOCATION ENGINE
Multi-strategy weights + daily PnL settlement + Policy.settle() — translates "sizing is the strategy" into automated on-chain flow; supports Kelly / fractional Kelly / custom models.
CONTRACTS
AllocationManagerDailyTickIStrategy
F* Execution Layer
EXECUTION LAYER
Merkle dividend root published on-chain + reserve injection / draw — settlement results materialise as on-chain events and holder wallets, fully traceable. (FeeRouter fee routing is a v1.1 plan, not yet on-chain.)
CONTRACTS
DividendManagerReserveFundMerkleClaim
F* Risk Layer
RISK & GOVERNANCE
Tiered guardian circuit breaker + K-of-N multisig governance — parameter changes, Policy swaps and emergency pause all flow through governance; the protocol gives integrators institutional safety boundaries. (Timelock upgrade delay is a mainnet plan.)
CONTRACTS
EmergencyControllerFundMultisig
The five modules are decoupled: an integrating fund may use only Custody + Strategy Hub (no fixed dividend), or the full set (like QDF's three-pool dividend). Modules communicate via events and permission interfaces, all constrained by the governance system.
06 — HOW IT RUNS
How It Runs
Investor lifecycle + the daily settlement pipeline
The protocol runs on two tracks: the investor's capital-side lifecycle — from compliance onboarding through subscription, holding, claiming dividends, and redemption — and the daily settlement pipeline triggered by a Keeper. After reading on-chain NAV and assets, allocation and dividend logic is decided only at the single pluggable step, Policy.settle; every other piece of the custody, pricing and risk chassis is shared across funds.
INVESTOR LIFECYCLEInvestor lifecycle
Holderwallet sign-in
KYC gatecompliance check
SubscribeSubscriptionManager
Mint sharesShareToken · FundVault
Hold · claimMerkle proof
RedeemRedemptionManager
DAILY SETTLEMENTDaily settlement pipeline
Keeper triggerdaily automation
DailyTickexecuteDailyTick
Read stateNAVOracle · AllocationManager
Policy.settlepluggable · pure fn
Reserve + dividendReserveFund · publishRoot
To walletHolder claim
value / data flowpluggable settlement (differentiation)
Policy.settle is the only swappable step in the pipeline — a fund defines its own allocation and dividend logic by implementing ISettlementPolicy, while the rest of the chassis stays shared, auditable and governable.
01 — METHODOLOGY
Methodology
How we translate the Kelly Criterion into a product
We build process around three things: signal, sizing, risk. Each is necessary — many funds die not for lack of signal but for lack of sizing discipline.
Signal
P, BEmpirical Bayes estimation of p (win-rate) and b (odds), with periodic backtest re-calibration. Every signal must pass out-of-sample thresholds (OOS Sharpe, MAR, Calmar composites).
Sizing
F*Fractional Kelly (commonly 1/4 to 1/2) applied on estimated (p, b), bounded by a multi-strategy covariance matrix that caps total leverage and per-strategy peaks.
Risk
RISKPer-strategy daily stop, portfolio monthly stop, reserve backstop. Any parameter change must be approved by an independent risk committee, traceable on-chain.
Beyond Kelly
Kelly is only the starting point. The real craft is robust parameter estimation, cross-strategy correlation modelling, and the judgement to act when models fail — which only comes from the market.
6+
CORE STRATEGIES
Full L1-L3 coverage
24/7
MARKETS
Global crypto never sleeps
f*
KELLY CRITERION
Growth-optimal mathematics
100%
ON-CHAIN VERIFIABLE
Monthly proof of reserves