A crypto-focused hedge fund is now accepting investors and raising funds for the launch of an algorithmic hedge fund to generate profits from the rapidly growing decentralized finance (DeFi) market, asÂ per a release.
DeFi: Where the party is at
Panxora, the fund, will start trading on 2 November 2020. The move comes after the burgeoning DeFi market has ballooned to billions of dollars starting June this year, leading to investors from both the crypto and traditional markets to take notice.
The Cayman Islands-based DeFi Fund will both manage the volatility associated with digital tokens and seek to profit from their price movements. Making this possible would be a proprietary trading bot that uses artificial intelligence (AI) to predict prices and place trades based on those opportunities.
Pandora said its models have been used to profitably trade cryptocurrency since 2017. They will now be used to identify and trade a variable basket of up to 20 of the most liquid DeFi tokens.
Gavin Smith, the managing partner at Panxora, said in a statement:
â€œWhile the DeFi market has grown significantly this year, we believe that this market is in the earliest possible stages.â€
He added the potential of the DeFi market is â€œso great that what we are experiencing now is just the first of many dynamic moves upwards over coming months and years.â€
Ethereum leading DeFi activity
The overallÂ DeFi marketÂ has grown over 400% since January of this year alone, noted Panxora. Investors have mainly been â€œexcitedâ€ about the use of blockchain to disrupt financial services and instruments in a trustless manner while using truly peer-to-peer trading exchanges like Uniswap.
CryptoSlateâ€™s DeFi page backs the sentiment. In the past month alone, the DeFi market has grown to over $11.95 billion and is now worth over 3.56% of the entire cryptocurrency market. Investors stood to lose -10.31%Â in the past week, and 8.25% in the past day if thier portfolio consisted ofÂ justÂ DeFi tokens.
Ethereumâ€™s the leader in this segment. Almost all the top-15 DeFi tokens are all based on the decentralized world computer, with onlyÂ SushiSwapÂ operating on its own blockchain.
And for some, a combination of such factors means outsized opportunity.