Valkyrie to Launch $100M ‘On-Chain DeFi Fund’

The fund will get yield from lending, liquidity pools, farming and staking, said the asset manager’s director of DeFi.

Nov 15, 2021 at 7:19 p.m. UTC
Updated Nov 15, 2021 at 8:55 p.m. UTC

Crypto asset manager Valkyrie Investments will launch a decentralized finance (DeFi) fund next week with $100 million behind it, designed to give investors safe and easy exposure to the fast-growing industry.

Valkyrie Investments last month received the blessing of the U.S. Securities and Exchange Commission (SEC) to launch a bitcoin futures exchange-traded fund (ETF). By adding a DeFi fund, Valkyrie joins the likes of Galaxy Digital, which recently launched a DeFi tracker fund.

However, Valkyrie’s “On-Chain DeFi Fund,” which goes live on Nov. 22, holds its assets on-chain and therefore goes some way beyond Galaxy’s passively managed DeFi fund, according to Valkyrie’s Managing Director of DeFi, Wes Cowan.

“This allows us to participate in the upside while also gaining additional yield from lending, liquidity pools, farming and staking in the DeFi ecosystem,” Cowan said via email. “We get the appreciation plus the compounded yield generated from on-chain DeFi participation.”

In terms of what mix of DeFi platforms the Valkyrie fund will invest in, the list is long, Cowan said, and includes most major DeFi protocols. “We see a lot of opportunities on blockchains including Ethereum, Avalanche, Solana, Binance Smart Chain, Matic and Fantom,” he wrote.

The $100 million came from existing Valkyrie investors, plus the firm’s general partners are all investing directly into the fund as well. The fund targets accredited investors in the U.S. and the majority of international countries, Cowan said.

In terms of assessing risk associated with DeFi investing, Cowan said the firm’s investment counsel works to determine what percentage of the portfolio should be in stablecoins. “Though even when in stablecoins, they are always deployed on-chain to generate yield,” he added.


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Ian Allison is a senior reporter at CoinDesk.