Three Arrows Capital-Affiliated Crypto Firm Raises $100 Million For New Liquid Token Fund – Here’s What You Need To Know
Defiance Capital has reportedly raised $100 million for its liquid token fund.
On Monday, The Block reported that the crypto investment firm completed the first close of the new fund, citing “two sources with direct knowledge of the matter”.
Although there was no word from the company itself about this development until the time of writing, it appears to have been confirmed by sharing the news story on its official Twitter account, as did its founder, crypto investor Arthur Cheong, who wrote:
“Crypto generally peaks on unbridled optimism, bottoms on hopeless pessimism. No better time to invest.”
The sources told the news outlet that the company raised “eight figures,” adding that the first raise came in under $50 million.
As for the investors who decided to back the fund, it was reportedly “a good mix” of them, including crypto funds, family offices and certain existing investors as well.
Cryptonews.com contacted DeFiance for comment.
What is Defiance Capital?
Founded in 2020, DeFiance Capital is a Web3 and crypto-focused investment firm that claims “many successful investments across DeFi, Web3 games and infrastructure.”
It also supported projects such as Aave, dYdX, Lido, Axie Infinity, Zero team, Offchain Labs (Arbitration), and others.
However, it was hit by the big blow that was the bankruptcy of the crypto hedge fund Three Arrows Capital (3AC), but soon distanced itself from it, claiming to be a separate company operating independently.
As reported last July, DeFiance Capital said it was “significantly affected” and “prejudiced” by the liquidation of rival fund 3AC. It also claimed that CEO Cheong had “no visibility” into Three Arrow Capital’s financial statements or conditions.
Soon after, in September, news broke that the company was in the process of raising $100 million for a “Liquid Venture Fund” and that it had already raised almost half of its target amount at that point.
“The best opportunities are already floating”
There has been increasing talk within the cryptosphere and beyond for some time now about floating tokens and floating token funds.
Pantera capital has its own Liquid Token Fund launched in 2017, describing it as “a multi-strategic vehicle that typically invests in 10-20 liquid tokens at any given time.” It adds that the fund is “predominantly driven by a discretionary strategy” focused on DeFi and adjacent assets.
According to the manager of growth by on-chain liquidity protocol BankorNate Hindman, “a Liquid Token is a smart contract that acts as an automated market maker by regulating the buying and selling of a token along a predetermined price curve, with a single pool of collateral to back it up.”
Therefore, the higher a floating token’s reserve ratio, the greater its price stability, Hindman argued, adding that,
“This new form of automated liquidity has the potential to transform the way users tokenize digital objects, communities, ecosystems and more.”
And many praised DeFiance Capital’s latest move, such as Adam Cochran, partner at Cinneamhain Ventures and a contributor to several DeFi projects,
Meanwhile, The Block claimed to have obtained a draft article written by DeFiance, which suggests that the fund’s goal is to get tokens that trade below venture round values.
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