The new funds by the California-based manager will invest directly in one of two large-cap tokens: AAVE, of the non-custodial lending protocol; and UNI, from the decentralized exchange Uniswap. Both are the largest DeFi protocols of their type.
Hedge funders – at least those with an appetite for crypto – have been warming up to the DeFi markets this year. A May study by consultancy PwC estimated that 31% of crypto hedge funds have used decentralized exchanges to execute trades and more than a quarter were invested in AAVE.
The tokens’ respective protocols have been surging for the better part of a year as investors of all stripes dug deeper into the crypto ecosystem. Aave’s lending tool boomed – up more than 70x since July 2020 with $6.9 billion in loans on platform. Uniswap’s trading platform processed over $60 billion in transactions in June alone.
SEC filings reviewed by CoinDesk show the AAVE fund, which was operational as early as April, had over $92 million in sales by the end of that month. A spokesperson said both funds contain “meaningful assets” but declined to provide details.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.