What is it ?
PennyWorks is an institutional-grade, 3rd-party fund accounting solution for DeFi asset managers and protocols. PennyWorks can generate daily NAV with all the backing reports, giving full traceability to every element on a fund’s balance sheet. This is made possible through PennyWorks’ software that systematically builds a fund’s financial statements bottom-up starting from its on-chain transactions.
What problem does it solve?
Computing NAV for DeFi activity is painful! Complex transactions across chains and protocols are hard to ‘decode’ and translate into accounting activity. This leaves fund managers with one of 3 options:
- Self-reporting NAV through self-serve tools (e.g. DeBank) → Often missing the bullet-proof accuracy needed for subscriptions & redemptions
- Using an accounting platform (e.g. TRES) → Requires configuration and dedicated ‘attention’, consuming valuable time away from trading
- Relying on traditional fund admins (e.g. Formidium) → Not experts in DeFi, leading to multiple back & forths to clarify simple transactions
Feature Highlights
3rd party NAV for curators and asset managers with the following features:
DeFi Native
- On-chain & off-chain coverage: Including CEXs, OTC txns, off-chain rewards and other manual adjustments
- Tax-optimized: Applying FIFO, LIFO, HIFO or bespoke lot matching logic; Also tracking lots globally or by wallet.
- Handling complex txns: Supporting yield farming, staking, looping, and trading of bespoke tokens, pools and vaults
- NFT support: Valuing, and tracking NFTs and bespoke DeFi tokens (Uniswap V3 Position NFTs/NFT backed loans)
100% accuracy
- Near-real-time NAV: Calculating NAV, outstanding shares, and performance fees to provide daily liquidity to LPs
- Audit-ready statements: Constructing accounting records from the bottom-up directly from the blockchain source data
- Interest accrual accounting: Recognizing unclaimed rewards & accrued interest within NAV calculations
- Performance attribution: Performing scenario and sensitivity analysis to identify portfolio exposure
Custom support
- Custom token pricing: Configuring asset prices to reflect realistic economic factors such as market impact, held-to-maturity yields, or specific price sources
- Position-level risk: Monitoring your exposure across chains, protocols & tokens
- Multi-currency support: Computing Balance Sheet and NAV using any currency or token as denomination
- Yield calculator & optimizer: Calculating money weighted rate of return on a per-position basis to properly isolate source of returns
How it works
Step 1 - Demo call: Schedule a call with Pennyworks to walk you through their methodology:
Step 2 - Onboarding: Provide your list of addresses. Note - there is NO limit to the number of addresses you can provide and this does not impact the commercial agreement.
Step 3 - Historicals: PennyWorks team takes 2-4 weeks to process all your historical txns [this is a critical step to capture all your open lots]. These txns are turned into accounting records to build your P&L and balance sheet bottom-up.
Step 4 - Daily/Weekly/Monthly NAV: PennyWorks team shares with you your NAV reports at the frequency that you choose - either via their dashboard, via a spreadsheet, or via their API.
Deal
For clients being referred by The Accountant Quits, Pennyworks will offer free historical NAV reports [covering all historical txns] + 1 month free NAV report.