DeFi is disrupting traditional finance - rent-extracting intermediaries are being replaced by trustless decentralised protocols.
- The open-source nature of DeFi = "round the clock" innovation, try fast/fail fast, free market capitalism on steroids.
- 24/7/365 trading in crypto markets = real-time pricing with no circuit breakers, survival of the fittest.
DeFi is nascent, but extremely complex. It has unique market dynamics due to generation-specific psychology, unique economic fundamentals, and unfamiliar systematic risk considerations. Navigating DeFi requires living and breathing this industry non-stop. DeFi is far from being finalised and cemented – far greater alpha is located outside of today’s top-10 DeFi protocols. We aim to beat the market and tier-1 tokens’ performance by applying our knowledge and experience.THIS IS A HIGHER RISK, HIGHER REWARD PLAY.
Discretionary investment management, whereby all buy & sell decisions are made by our portfolio managers at their discretion (reviewed and approved by the investment committee). The portfolio is heavily reliant on fundamental analysis, not technical analysis.
Asset Selection is not tailored to any specific sector or vertical; rather it follows the broader DeFi narrative:
- Core DeFi protocols - money & capital markets, derivative platforms, AMMs, DEXs and DEX aggregators, asset managers & yield aggregators, insurance, etc.
- DeFi middleware - oracles, data indexing, interoperability bridges & wrappers, scalability, privacy & security, data analytics, etc.
Strategies will be demonstrated by publishing updates and asset rotation commentaries on the Enzyme platform to make it easier to report the progress.
- Long – the portfolio will be heavy on long positions.
- Neutral – the portfolio might be fully or partially rotated to cash and cash equivalents when corrections or dips are anticipated.
- Short – occasional shorts via inverse assets are possible, but won't be sought proactively.
- Yield Farming – the portfolio will seek to rotate into yield-bearing assets when possible and economically expedient.
- Liquidity Mining – will be sought when possible, although the availability might be limited due to technical constraints.
- Leverage – might be pursued later, but not currently available due to technical constraints.
- Stablecoins: Accepted - USDC, DAI, GUSD; Excluded - USDT, TUSD, BUSD, sUSD (these stablecoins might be used as part of a transaction, but not as a position).
- Derivatives – no allocation will be given to futures, options, swaps, etc.
- NFTs (Non-Fungible Tokens) – no allocation will be given to ERC-721 tokens and to tokens representing NFT-related platforms and infrastructure.
- Social Tokens – no allocation will be given to tokens, representing individual persons and/or communities.
- Elastic Supply Tokens – no allocation will be given to tokens that have algorithmically-adjusted elastic supply.