On-chain fund administration is the performance of some or all of a fund administrator's duties using a blockchain as the system of record. Investor holdings are represented as tokenised fund units, and subscriptions, redemptions, transfers and distributions are executed by smart contracts that issue or cancel tokens against payment, sometimes in a stablecoin or tokenised deposit. The shared ledger replaces separate records that the administrator, transfer agent and distributors would otherwise reconcile with one another.
The model has been applied mainly to tokenised money market funds and private funds. Valuation of the portfolio, calculation of the net asset value, investor due diligence and regulatory reporting still take place largely off the chain, with results published to it. Legal responsibility remains with the appointed administrator and the fund's board, and regulators generally expect an off-chain copy of the register. The work extends conventional fund administration and relies on an on-chain transfer agent and sound smart contract governance.