Positive Returns During Crypto Winter

Positive Returns During Crypto Winter

MEV Capital, Lithuania-based digital asset management and Web3 data intelligence company with more than $25 million in Assets under management, has outperformed most of its peers and brought positive returns to investors amid one of the most significant sell-offs in the crypto market seen in recent years.

The trend-agnostic crypto hedge fund is implementing market-neutral strategies to generate stable yield returns mainly through liquidity provision, statistical arbitrage, and on-chain loan liquidations on a set of decentralized applications.

During the highly volatile period when the crypto market suffered significant sell-offs induced by the contagion effect from the liquidations of over-leveraged crypto entities, MEV Capital was able to secure a high single-digit return over the same period. From May to July this year, MEV Capital applied conservative trading strategies to safeguard investor capital in the DeFi market. As a result, the digital asset manager succeeded in outperforming most crypto trading firms that suffered drawdowns in the same period.

Our mandate for the last quarter was to protect clients’ capital first during this chaotic time, while yield generation took a secondary role. However, we were happy about our ability to achieve positive returns for the said period,” says Laurent Bourquin, General Partner and Chief Investment Officer of MEV Capital.

“The yields we are able to generate are directly linked to the activity in the crypto-market, which is naturally lower when the macroeconomic conditions are tight, but tends to come with large order flows and volatility spikes, generating other types of opportunities.” 

MEV Capital has been running a set of blockchain-based strategies mainly exposed to stablecoins since 2021. It primarily targets crypto-native entities, HNIs, and institutional investors for DeFi exposure and tailor-made advisory. MEV Capital’s client list includes ex-hedge fund managers, digital asset investment firms, family offices, and a financial product structurer with $4 Billion in sales volume in 2021. 

The next phase for MEV Capital is the expansion and rapid growth. Besides capital allocation and yield strategies, the company is heavily focused on MEV research & development efforts aimed at maintaining a competitive edge and solidifying its market position by focusing on proprietary infrastructure to interact with decentralized networks.

Highest quality asset management in DeFi is inseparable from having in-house trading systems coupled with geo-distributed integrations to ensure the lowest latency and just-in-time order completion. Designing the strategies, fetching the required data, and automating executions in a decentralized environment is incredibly complex. Only a handful of companies can do that at a profitable scale.

Even though DeFi has been around for just a few years, the competition in MEV activities is already fierce. We had to move from standard strategies to focus more on long-tail events and cross-chain cases, where trades are not as crowded,” added Laurent Bourquin.

Currently, the company is preparing for its Seed round in the autumn of 2022. MEV Capital was founded in 2021 by Laurent Bourquin and Gytis Trilikauskis.

DeFi event recap (video)

DeFi event recap (video)

You could do it swaggering like famous investor Peter Thiel, who coined the term “financial gerontocracy” while speaking about the global banks at the recent conference “Bitcoin’2022”. You could call names. Or you could give a hand for support. It seems that our community is of that latter kind.

MEV Capital hosted the conference “Decentralized finance during geopolitical uncertainty” at Rockit in Vilnius, Lithuania. Our partners Gytis and Laurent talked about the infrastructure, development, and products in the DeFi market. M.Sviderskė, CMO at Lossless, covered the intriguing topic of security in DeFi.

And the keynote speaker Feyo Sickinghe, Fund Manager at Target Global delivered his insights on common pitfalls for Web3 entrepreneurs. All these and some other topics have been disentangled during the final discussion “Bridging the gap between traditional and decentralized finance” moderated by R. Saribekian from Synergy Finance.

Building bridges, indeed. More meetups like this are on the agenda.

If you were not there or did not have the opportunity to watch the live stream – not a problem, the video recording is available any time on Youtube for your convenience.

 

First regulated DeFi Investment fund enters Europe

First regulated DeFi Investment fund enters Europe

Lithuania’s first Decentralized Finance (DeFi) Investment Fund – MEV Capital Stablecoin Enhanced Yield Fund – will invest in crypto assets.

Lighthouse Asset Management has launched Lithuania’s first Decentralized Finance (DeFi) Investment Fund – the MEV Capital Stablecoin Enhanced Yield Fund. The Fund, whose units are available only to professional investors, has a target size of USD 50 million.

The new fund focuses on the blockchain technology-based decentralized finance market, and the stablecoins used in that market have been chosen as one of the fund’s main investment vehicles.

“The creation of this fund is a noteworthy event, reflecting changes in the traditional financial and the crypto markets, which are gradually finding more points of convergence. Decentralized Finance is a kind of fusion of those two worlds, taking advantage of the benefits of both: DeFi protocols utilize stablecoins to apply traditional investment strategies and techniques. The major difference is that blockchain transactions are immutable and settled in a permissionless way without reliance on any financial intermediary. This Fund clearly stands out in our portfolio of funds both for its investment strategy and its management approach,” says Šarūnas Butkus, the Chairman of the Board at Lighthouse Asset Management.

The tools needed to monitor and analyze the Decentralized Finance market have been provided to the fund management company by the DeFi & Web3 research and development firm MEV Capital.

“Decentralized Finance combines the experience of the traditional financial system with digital innovations, so it’s no wonder that in just a few years DeFi’s Total Value Locked (TVL) has reached USD 200 billion. We are the only company in Lithuania developing analytics tools for the decentralized finance market. Blockchain technology enables investors to track many indicators in real-time, meaning that huge amounts of data must be processed every second. Our company helps sort and organize that information, so all that our clients have to do is make decisions. We hope that partnership with Lighthouse Asset Management will enable us to understand investors’ needs even better and expand our basket of products,” says MEV Capital Investment Manager Laurent Bourquin.

In managing investments, the MEV Capital Stablecoin Enhanced Yield Fund uses techniques of liquidity provision, price arbitrage, carry trading (where a low-interest-rate currency is converted into a currency with a higher return), and on-chain loan liquidations.

The Fund plans by 2024 to fully form its portfolio, with a value of USD 50 million.

The Fund formally began operations in September, when its rules were approved by the Bank of Lithuania’s Financial Services and Market Supervision Department. Legal and technological arrangements for the Fund took several months.

In addition to this Fund, Lighthouse Asset Management manages two others whose strategies focus on real estate, digital innovations, high-tech projects, and start-ups.

The potential of Decentralized Finance

The term Decentralized Finance (DeFi) refers to financing programmes carried out by means of smart contracts on a blockchain. DeFi allows borrowing and lending operations and trading in financial derivatives, insurance, and assets. It differs from the traditional financial market in that all operations are performed by the two parties to the transaction, without the involvement of any intermediary (bank or other financial or credit institution).

While DeFi protocols use a variety of cryptocurrencies, a large part of which is settled in stablecoins – cryptocurrencies which are pegged to some other currency, such as the US dollar.

As stablecoins are directly tied to another currency, in the long run their value is less volatile. The total size of the stablecoin market is currently more than USD 100 billion.

The MEV Capital Stablecoin Enhanced Yield Fund in brief:

  • Intended only for professional investors
  • Invests in stablecoins: ALUSD, BUSD, DAI, FRAX, GUSD, LUSD, MIM, OUSD, SUSD, TUSD, USDC, USDN, USDP, USDT, YUSD, SEUR, EURS, EURT, JEUR, RAI & etc.
  • Has a 2% annual management fee and a 20% performance fee
  • Targets an internal rate of return of 20%
  • Managed by Lighthouse Asset Management
  • Audited by Moore Mackonis, UAB

About Lighthouse Asset Management

Lighthouse Asset Management is the first licensed investment management company in Western Lithuania. The main investment directions of the funds it manages are real estate, digital innovations, high-tech projects and start-ups, and other businesses that create real value for the environment, society, and the economy. Its funds’ operations are audited annually and are licensed and supervised by the Bank of Lithuania.

About MEV Capital

MEV Capital is the first Decentralized Finance market research and development company in Lithuania. It develops tools for real-time DeFi market data analysis and intelligence, web3 integrations, and proprietary trading algorithms for operations in both centralized and decentralized crypto trading exchanges. The company’s own financial and blockchain analysts continually monitor the development of Decentralized Finance services and apply that know-how to enhance MEV Capital’s investment strategies.

For more information contact:

Aistė Veberaitė
Project Manager at Publicum Financial Communications
Tel. +370 616 98510
Email a.veberaite@publicum.lt