================================================================================ HFUND WHITEPAPER v1.0 Institutional-Grade Crypto Investment Fund ================================================================================ 1. INTRODUCTION -------------------------------------------------------------------------------- Hfund is a decentralized investment platform that provides retail investors access to institutional-grade crypto trading strategies. By pooling capital and deploying it through algorithmic market-making on the Lighter DEX, Hfund generates returns that are shared with investors through a transparent, tiered profit-sharing model. The platform operates on a simple premise: users deposit USDC, select their investment parameters, and receive a proportional share of the fund's trading profits. The entire lifecycle - from deposit to maturity - is managed through a secure web interface with on-chain verification. 2. HOW IT WORKS -------------------------------------------------------------------------------- 2.1 Investment Lifecycle Step 1: Deposit - Users connect their Web3 wallet (MetaMask, etc.) - Transfer USDC on Arbitrum (recommended) or Ethereum - Deposits are auto-verified on-chain and credited to balance - Minimum deposit: $50 Step 2: Create Investment Contract - Choose investment amount (minimum $100) - Select lock period: 30, 60, 90, or 180 days - Review profit share breakdown and confirm - Amount is deducted from balance immediately - Contract enters "pending" status for admin approval Step 3: Admin Approval & Activation - Admin reviews the contract and deposits funds to the trading account - Upon approval, contract becomes "active" - Lock period countdown begins from approval date - Daily PnL allocation starts the following day Step 4: Earning Returns - Fund trades on Lighter DEX using market-making strategies - Daily trading PnL is calculated and allocated to active contracts - Each contract earns proportional to its amount and profit share % - Earnings are updated daily and visible on the dashboard Step 5: Maturity & Payout - At end of lock period, contract auto-matures - Payout = Principal + Earned Profit - $3 Contract Fee - Payout is credited to user's balance - User can withdraw to their external wallet 2.2 Early Withdrawal Users may withdraw before the lock period ends with the following conditions: - If the fund is in loss: Full principal returned minus $3 fee - If the fund is in profit, earnings are reduced on a sliding scale: * >75% of lock period elapsed: 30% of earned profit * 50-75% elapsed: 20% of earned profit * 25-50% elapsed: 10% of earned profit * <25% elapsed: 0% of earned profit (principal only) This mechanism incentivizes longer commitments while preserving capital protection for investors. 3. PROFIT SHARING MODEL -------------------------------------------------------------------------------- 3.1 Base Profit Share (by Investment Amount) Investment Amount Base Share ---------------------------------------- $100 - $4,999 51% $5,000 - $24,999 60% $25,000 - $99,999 69% $100,000+ 78% The base share represents the percentage of the fund's trading profit allocated to the investor's contract. 3.2 Level Bonus Users earn a level bonus added to their base share: Level Bonus Score Required ---------------------------------------- Bronze +0% 0+ Silver +2% 200,000+ Gold +5% 1,000,000+ Platinum +10% 4,000,000+ 3.3 Lock Time Bonus Period Bonus ---------------------------------------- 30 days -1% (penalty) 60 days 0% (baseline) 90 days +1% 180 days +2% 3.4 Total Profit Share Total Share = Base Share + Level Bonus + Lock Time Bonus Maximum cap: 90% Example: A Gold-level user investing $10,000 for 180 days: Base: 60% + Level Bonus: 5% + Lock Bonus: 2% = 67% profit share If the fund earns $1,000 on this contract, the user receives $670. 4. LEVEL SYSTEM -------------------------------------------------------------------------------- 4.1 Level Score Calculation Level score determines a user's tier and associated benefits: Score = SUM(min(lock_days, 30) x contract_amount) for all contracts + 0.1 x SUM(referred_users' level_scores) The lock_days multiplier is capped at 30 to keep level progression balanced. Contracts of all statuses (active, matured, early-withdrawn) contribute to the score. Referral contributions are calculated bottom-up, meaning the score reflects the full depth of a user's referral network. 4.2 Level Thresholds Bronze: 0+ score Silver: 200,000+ score Gold: 1,000,000+ score Platinum: 4,000,000+ score 4.3 Level Benefits Higher levels unlock: - Increased profit share bonus (up to +10%) - Higher referral commission rates (up to 15%) - Priority support access Levels are recalculated daily and may upgrade or downgrade based on score changes. 5. REFERRAL PROGRAM -------------------------------------------------------------------------------- 5.1 How It Works Each user receives a unique referral code upon registration. When a new user signs up using this code, the referrer earns a percentage of the company's profit from the referred user's contracts. 5.2 Referral Rates (% of Company Profit) Referrer Level Rate ---------------------------------------- Bronze 5% Silver 8% Gold 10% Platinum 15% 5.3 Calculation When a referred user's contract completes (matured or early-withdrawn): 1. Total trading PnL is reconstructed from user's earnings and share % 2. Company profit = Total PnL - User's earnings 3. Referral bonus = Company profit x Referral rate 4. Bonus is credited to referrer's balance immediately Referral bonuses are only paid when: - The referred user earned positive returns - The company earned positive profit on the contract - The referrer's level at payout time determines the rate 5.4 Score Contribution Referred users' level scores contribute 10% to the referrer's score, creating a network effect that rewards both investment and community building. 6. FEE STRUCTURE -------------------------------------------------------------------------------- Fee Type Amount ---------------------------------------- Deposit Fee None Withdrawal Fee None (balance withdrawals are fee-free) Contract Fee $3 flat (applied on contract maturity or early termination) Management Fee None Performance Fee Retained as company profit share (100% minus user's profit share %) Minimum Amounts: Deposit: $50 Investment: $100 Withdrawal: $50 7. TRADING STRATEGY -------------------------------------------------------------------------------- 7.1 Platform Hfund operates on Lighter DEX, a high-performance zkEVM-based perpetual futures exchange. Lighter provides: - Low-latency order execution - Deep liquidity across crypto pairs - Zero gas fees for trading operations - Transparent on-chain settlement 7.2 Strategy Overview The fund employs algorithmic market-making and liquidity provision strategies on perpetual futures markets. Key characteristics: - Automated position management with risk controls - Multi-pair diversification - Funding rate capture - Spread optimization 7.3 PnL Calculation Daily profit and loss is calculated from the fund's actual trading performance on Lighter DEX: 1. Total fund equity and daily trading PnL fetched from Lighter API 2. PnL excludes deposit/withdrawal effects (pure trading performance) 3. Daily ROI = Daily PnL / Starting Balance x 100 4. Cumulative ROI compounds daily 5. Each contract's earnings = Daily PnL x (Contract Amount / Total AUM) x User's Profit Share % 8. SUPPORTED NETWORKS & CURRENCIES -------------------------------------------------------------------------------- Network Chain ID Currency USDC Contract --------------------------------------------------------------- Arbitrum One 42161 USDC 0xaf88d065e77c8cC2239327C5EDb3A432268e5831 Ethereum 1 USDC 0xA0b86991c6218b36c1d19D4a2e9Eb0cE3606eB48 All investments are denominated in USDC (USD Coin), a fully-backed US dollar stablecoin. Arbitrum is recommended for lower gas fees. 9. SECURITY -------------------------------------------------------------------------------- 9.1 Authentication - JWT-based sessions with 30-minute expiration - Email/password with bcrypt hashing - Google OAuth 2.0 integration - Email verification required - Cloudflare Turnstile bot protection 9.2 Withdrawal Protection - Two-factor verification via email (6-digit code) - 10-minute code expiration - 3-attempt brute-force lockout - Amount pinning between code request and submission - Row-level database locking on balance operations 9.3 Rate Limiting - Global: 60 requests/minute per IP - Sensitive endpoints: 3-10 requests/minute - Auth lockout: 5 failed attempts triggers 15-minute block 9.4 On-Chain Verification - Deposits auto-verified by checking on-chain transaction data - Validates: transaction hash, recipient, amount, confirmations - Failed verification flags deposit for manual admin review 9.5 Infrastructure Security - HTTPS/TLS with strict transport security - Content Security Policy headers - CSRF token protection - HttpOnly, SameSite cookies - Clickjacking protection (X-Frame-Options: DENY) 10. RISK DISCLOSURE -------------------------------------------------------------------------------- - Cryptocurrency trading involves substantial risk of loss - Past performance does not guarantee future results - The fund's trading strategies may result in negative returns - In case of loss, users receive their full principal back (minus fees) but earn no profit - Smart contract risks exist on underlying blockchain networks - USDC depegging risk, though historically minimal - Lighter DEX platform risk (exchange solvency, technical issues) - Regulatory risks in various jurisdictions 11. COMMUNITY & SUPPORT -------------------------------------------------------------------------------- The Hfund community is supported through multiple channels: Telegram Community: https://t.me/hfundfinance - Official announcements, market updates, and community discussion - AI-powered moderation to maintain a safe environment - Curated crypto news reposts from top channels Telegram Support Bot: https://t.me/hfundfinancialbot - 24/7 AI-powered support for platform questions - Instant responses about Hfund features, profit sharing, and more - Available in any language Platform: https://hfund.finance Email: hfundfinance@gmail.com ================================================================================ Copyright 2026 Hfund Finance All Rights Reserved ================================================================================