Valkyrie Investments, one of the largest bitcoin asset managers, said this week that it would offer a “on-chain defi fund.” This new fund would be significantly different from existing offers in the market owing to the location of the assets that would be accessible for yield in many protocols. This effort has already received $100 million in funding.
Yesterday, Valkyrie Investments announced the creation of their first on-chain defi fund, which will invest in defi blue chips. The distinction between this fund and other offers is in the geographical location of its funds. While other funds passively follow asset values, Valkyrie proposes to keep assets on-chain. This implies they will be able to make yield and passive revenue by using them to place these assets in various procedures.
Wes Cowan, managing director of defi at Valkyrie, stated: This enables us to benefit from the upside while also generating extra revenue via lending, liquidity pools, farming, and staking in the defi ecosystem. We get the appreciation in addition to the compounding profit earned by defi participation on-chain. The fund will begin with $100 million in capital from numerous investors and the firm’s general partners.
The decentralised financial ecosystem is a big and diversified movement that exists on a number of cryptocurrency chains. While other investors are mostly interested in known protocols like as Ethereum, Valkyrie’s plan seems to be more daring. Cowan verified this when he listed the chains in which the fund intends to invest. Cowan stated
We believe that blockchain technologies like as Ethereum, Avalanche, Solana, Binance Smart Chain, Matic, and Fantom provide several prospects.
While this does not necessarily indicate they will invest in native tokens in these ecosystems, the inclusion of some of these choices is noteworthy and demonstrates the rise of some of these networks. However, the portfolio’s makeup, in terms of which tokens would be kept and in what percentage, remains unknown.
Cowen admitted that stablecoins might be a significant part of the portfolio, adding: Though they are always deployed on-chain to create yield, even when in stablecoins.
The introduction of this fund may inspire additional participants to place their assets on-chain in order to generate income, but it also brings new dangers for those participating in the fund.
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