Web3 Structured Investment: Opportunities and Challenges Coexist

As investment in the secondary market becomes limited and the threshold for primary investments remains high, structured investments are attracting increasing attention from high-net-worth investors. This "old play" derived from traditional finance has been introduced into the Web3 space, providing investors with more flexible and customizable options.

The Application of Structured Investment in Web3

Structured products in Web3 essentially involve the splitting and restructuring of rights to income to accommodate different risk preferences. Currently, the following main categories exist in the market:

fixed income products

These products package future earnings ( such as staking returns, DeFi interest rates, etc. ) and sell them in the form of fixed annualized returns. Some DeFi platforms also tokenize the rights to these earnings, splitting them into the earnings part ( YT ) and the principal part ( PT ).

convertible bonds / income certificates

Mainly used for primary investments or project cooperation, adopting the "debt first + Token opportunistic conversion" model. Investors obtain the right to purchase Tokens in the future through agreements such as SAFT, while enjoying fixed returns.

Risk Layering Fund

Package assets and divide them into different risk levels, usually divided into the Junior layer that bears the main risk and the Senior layer that enjoys priority profit sharing. This model originates from the traditional finance CDO and has been restructured in Web3.

platform-type structured products

Led by exchanges, wallets, or third-party platforms, completing the entire process from design to sales. These products lower the participation threshold for ordinary users, but also bring new challenges.

Legal and Compliance Challenges

Participating in Web3 structured investments faces numerous compliance issues:

1. Investor Qualifications: Many products are only available to qualified investors, and ordinary individuals may have crossed regulatory lines by participating.

2. Fund Flow: Cross-border fund transfers may involve issues such as foreign exchange controls.

3. Product Complexity: Investors need to fully understand the product structure and risks; otherwise, they may incur additional liabilities.

4. Platform qualification: It is necessary to confirm whether the platform has the qualification to sell related products.

Compliance Participation Suggestions

To reduce risk, investors may consider the following measures:

1. Establish a clear identity structure, such as an offshore SPV, a Hong Kong family office, etc., rather than participating as an individual.

2. Ensure that the flow of funds is compliant, use bank accounts that match the identity structure, and complete currency exchange through licensed institutions.

3. Carefully select the platform, paying attention to its registration location, sales qualifications, asset disclosures, and other information.

Structured investment offers new opportunities for Web3 participants, but it also requires investors to have a higher level of risk recognition and compliance awareness. When participating, it is essential to comprehensively assess one's own conditions, understand the product logic, and establish a sound compliance framework in order to progress steadily in this field.