The cryptocurrency money manager Panxora seeks to raise $50 million for a new hedge fund to buy digital tokens in association with the fast-growing decentralized finance (DeFi) sector.
DeFi is an important of the blockchain environment that mainly consists of a set of automated trading platforms that has the purpose of putting aside banks and other firms. But it is a movement that is growing up, and rapidly, so the new fundraising effort is getting underway just as prices are collapsing for some of the leading DeFi projects, that includes Yearn. Finance and Aave.
DeFi projects are defined as protocols and mostly built atop the Ethereum blockchain, and is soaring in popularity this year. Its motor is the “yield farming” craze that encourages crypto traders to sock digital assets into the trading and lending systems to reach high-interest rates, token rewards, and faster gains. Dollar-linked tokens can be also called stable coins that can carry rates by year up to 20% through Yearn.
Big cryptocurrency exchanges like Binance and Coinbase urged to cash in on the trend, listing DeFi tokens, all of this with the mission to grow up the market volumes so they could suffer a migration to the platforms intended for decentralized trades.
But just in the past week, the trend suffered a reversion, with a declination of about $9.5 billion. Also, as prices crashed down for bitcoin (BTC), the largest cryptocurrency, and ether (ETH), the native token of the Ethereum blockchain, DeFi-affiliated tokens crashed abruptly harder.
Aave, a decentralized lender, saw its tokens crash down by 12% during the seven days through Tuesday, according to Messari, a cryptocurrency data firm. OMG’s OMG tokens dove 54%, while Yearn. Finance’s YFI tokens are down 29%. It’s been “an absolute bloodbath,” Messari analysts wrote Tuesday in their daily newsletter. “DeFi’s casino summer could be coming to an end.” This means that DeFi systems are defined to grow on their terms, over long periods, many of the digital tokes are too new, so the difficulty to value using traditional financial analysis increases and reaches impossible levels.
The Cayman Islands is where Panxora’s new hedge fund is based and scheduled to start trading on Nov. 2nd. Panxora’s new hedge fund will buy tokens listed on big centralized cryptocurrency exchanges instead those from the roster of decentralized, automated exchanges like assembled by DeFi developers.
Smith, Former Metals-Pricing Analyst for for the Singaporean commodities-trading firm Trafigura, states that that is primarily because few if any decentralized exchanges are able to guarantee sufficiently the fulfillment of anti-money-laundering rules. Also, because a token listing from an exchange theoretically implies some level of vetting.
Smith, Former Metals-Pricing Analyst for the Singaporean commodities-trading firm Trafigura, says that’s primarily because few if any decentralized exchanges show sufficient guarantee as well as compliance with anti-money-laundering rules, is mainly because a token listing from an exchange theoretically implies some level of vetting.
By: Jenson Nuñez.
