Whitepaper
Whitepaper
This whitepaper sets out the architecture, investment strategies, dividend mechanism, risk control and governance of Quantum Dream Fund I. It is intended for institutional and sophisticated investors and is not a securities offering.
Background & Founder's Vision
Combining the judgement of a veteran investor with the execution of a new generation of AI.
Xue Manzi is a first-generation Chinese angel investor with over 30 years of experience spanning the internet, mobile and crypto cycles, and more than 200 portfolio companies including UCWeb, Mecox Lane and 58.com.
First, AI has already surpassed most human fund managers in quantitative trading. Second, structural inefficiencies persist in crypto markets — fragmented, 24/7, derivative-rich — leaving alpha that has long since disappeared from traditional markets.
Architecture & Legal Entities
Quantum Dream Foundation
BVINon-profit foundation, governed by charter.
Quantum Dream Capital Ltd.
CAYMANInvestment management entity, licensed operations.
Smart Contract Layer
ARBITRUM / BASESubscription · dividend · reserve.
Xue Manzi serves as Founder & Chief Brand Officer. He is neither the investment manager nor the fund manager. Investment decisions are made by the licensed team, and the founder's personal risk is legally separated from the fund.
- Mainnet Arbitrum One — low gas, institutionally mature
- Secondary network Base — user-friendly, Coinbase ecosystem
- Cross-chain bridges: official LayerZero / CCIP only
Not open to residents of the US, mainland China or Hong Kong; dual front-end IP and on-chain KYC screening; subscriptions and redemptions in USDC / USDT only.
Strategy Portfolio
Seven strategies in parallel, dynamically weighted by AI.
| STRATEGY | WEIGHT | CAPACITY |
|---|---|---|
| Funding-rate arbitrage | 25% | High |
| Cross-market arbitrage | 15% | Mid |
| MEV on-chain arbitrage ★ | 10% | Low |
| Options market making | 15% | Mid |
| Event-driven ★ | 10% | Low |
| CTA trend following | 15% | High |
| Stablecoin base yield | 10% | High |
MEV on-chain arbitrage and event-driven are core strategies (★). The target annualised figure is a conservative reference and is not a promise of returns of any kind; the max drawdown, leverage and VaR caps are hard constraints.
Daily Dividend Mechanism
A three-pool structure — a dividend on profit and loss days alike.
Pool A · Base Yield Pool
Source: USDC interest on Aave / Pendle + tokenised treasuries. Contributes 4–5% annualised, securing the fixed daily dividend.
Pool B · Alpha Pool
Source: net daily profit of the seven strategies. Profit is split 30% to the dividend / 70% into NAV.
Pool C · Dream Reserve
Source: 10% of strategy profit injected on profitable days. Target 15–20% of AUM, capped at 25%, topping up the fixed dividend on loss days.
- 1
Fetch NAV
Read today's / yesterday's NAV
- 2
Compute fixed dividend
AUM × 6% / 365
- 3
Determine P&L
PnL > 0 ? Y : N
- 4
Allocate
Profit → three pools; loss → reserve backstop
- 5
Distribute on-chain
Merkle Drop of USDC, event broadcast
The daily dividend is, in essence, an early distribution of fund assets — not a guarantee of stable external returns. If the reserve is exhausted, the dividend may be reduced, suspended or fall to zero.
NAV Oracle & ZK Proof
Three-party verification + zero-knowledge proof of reserves.
- 1
Position snapshot
Private and off-chain, generated daily at 00:00 UTC
- 2
Three-party verification
Custodian Anchorage / Auditor Armanino / Chainlink Oracle
- 3
On-chain only on agreement
Written only when all three signatures agree
- 4
Drives core processes
Subscription pricing · redemption · dividend calculation
What it proves: total assets ≥ total liabilities + all holder valuations. What it never reveals: specific positions, position sizes, counterparty identities. It satisfies both “private positions” and “fully verifiable” cryptographically.
Subscription & Redemption
Subscription is instant; redemption settles on T+3.
Minimum subscription
10,000 USDC
Subscription fee
0%
Lock-up
30 days; dividend paid normally throughout
Subscription flow: USDC → KYC → call deposit() → mint QDF at the day's NAV → 30-day lock-up.
| HOLDING PERIOD | REDEMPTION FEE |
|---|---|
| < 90 days | 2.0% |
| 90 – 180 days | 1.0% |
| ≥ 180 days | 0% |
100% of the redemption fee is injected into the Dream Reserve, shared by all holders.
Liquidity management: daily redemptions are capped at 10% of AUM, with any excess queued FIFO; in extreme markets an emergency freeze of up to 7 days may be invoked.
Governance & Fee Structure
Currently 5/9 multisig governance, moving gradually toward a DAO.
- Founder representative (Xue Manzi): 1 seat
- Investment management team: 3 seats
- Independent directors (incl. a former compliance officer): 2 seats
- Technical security representative: 1 seat
- Holder representatives (elected): 2 seats
- 1
Month T+12
Issue the $DREAM governance token
- 2
Parameter votes
Holders vote on parameter changes
- 3
Strategy changes
Strategy mix adjusted by vote
- 4
Full DAO
The foundation retains an emergency veto
| ITEM | TERMS |
|---|---|
| Management fee | 1.5% annually, accrued daily |
| Performance fee | 20% above 6%, high-water mark |
| Subscription fee | 0% |
| Redemption fee | Tiered by holding period, 0 – 2% |
Risk Control Framework
Three lines of defence: on-chain risk, strategy circuit breakers and counterparty diversification.
Smart contract bugs
Dual audit by CertiK + Trail of Bits · 20M USD Immunefi bug bounty.
Key security
Fireblocks MPC + 5/9 hardware multisig.
Oracle manipulation
Three independent price feeds + automatic pause on >2% deviation.
Bridge risk
Official LayerZero / CCIP bridges only, no overnight positions.
- Daily -3%: pause new trades, close-only
- Daily -5%: close all strategies, enter observation mode
- Monthly -10%: trigger a DAO vote on whether to pause the fund
- Reserve < 5% of AUM: suspend the floating dividend, route all profit to the reserve
- Funds on any single CEX ≤ 20%
- USDC ≤ 70% (primary stablecoin)
- USDT / DAI ≤ 30% / ≤ 15%
- Any single DeFi protocol ≤ 15%
Disclosure Tiers
Private positions, partly transparent operations — a three-tier transparency framework.
L1 · Public Layer
PUBLIC LAYEROpen to all · daily: NAV, trade count, win rate, broad strategy exposure.
L2 · Holder Layer
HOLDER LAYERKYC'd holders · weekly: sector and strategy attribution, risk metrics, rebalancing direction.
L3 · Manzi's Voice
MANZI'S VOICEOpen to all · weekly: founder market commentary, the “AI vs Manzi” record, strategy philosophy.
Specific positions, rebalancing timing, AI model parameters, factor weights, counterparty identities and short-term strategy paths.
Roadmap & Team
An 18-month path. See the Governance & Roadmap page for the full timeline.
- 1
Phase 0 · Now
Preparation: entity setup, contract development, live strategy validation
- 2
Phase 1 · 2026 Q2
Audit & closed beta: dual audit, custody integration, 5M USDC seed round
- 3
Phase 2 · 2026 Q3
Public launch: targeting an initial AUM of 20M USDC
- 4
Phase 3 · 2026 Q4
Expansion: content rollout, AUM of 50M
- 5
Phase 4–6 · 2027
Second issuance, the $DREAM governance token, full DAO transition
The initial AUM is hard-capped at 30M USDC. Beyond this scale, higher-yield strategy capacity decays and would degrade the holder experience.
Key Risk Statement
Risk of total loss of principal
Crypto asset prices are highly volatile, quantitative strategies may fail, and smart contracts may be exploited. The funds you invest may go to zero.
The true nature of the daily dividend
The dividend is, in essence, an early distribution of fund assets — not a guarantee of stable external returns. If the reserve is exhausted, the dividend may be reduced, suspended or fall to zero.
No guarantee of principal
The daily dividend mechanism is not a guarantee of principal or returns of any kind. In extreme markets, the dividend may in fact accelerate the loss of principal.
Restricted jurisdictions
Not offered to residents of the US, mainland China, Hong Kong, North Korea, Iran and others. See the Risk Disclosure document.