New Crypto Staking Fund Aims For $200M Ahead Of Ethereum Merger
- The strategy plans to invest in 20-30 of the best proof-of-stake tokens
- Fixed income style play has risk exposures which may be increased or decreased at the discretion of the sponsors
The company behind what it dubbed the first evergreen venture capital fund is aiming to raise some $200 million for a new vehicle that plans to bet on staking opportunities as the market nears. long-awaited Ethereum merger.
COSIMO Ventures began trading the fund’s strategy, COSIMO Y, with internal capital earlier this year, managing partner Rob Frasca told Blockworks. The plan is to hold an initial close on the sponsor funds in the third or fourth quarter on an expected initial capital constraint of approximately $1 billion.
COSIMO has garnered interest from crypto-native and traditional financial investors, including family offices, for its latest venture. The strategy is to support 20-30 of the largest proof-of-stake validation mechanisms, along with associated derivatives to hedge against downside market risk. Portfolios can be assigned three risk profiles to dial up or down which is essentially a fixed income approach which, by removing hedging, can have a heavy beta.
The main goal, however, is to trade with as much of a delta-neutral approach as possible.
“The whole world is moving to proof-of-stake — and so are we,” Frasca said.
The fund – which partners with several deposit providers – offers monthly withdrawals subject to 30 days notice. Limited partners have the option, if they choose, to reinvest the proceeds on a quarterly basis, a tactic Frasca calls “coin-stacking.”
Whereas COSIMO Y does not support the yield farming aspects of DeFi or put investors’ capital to work in more esoteric corners of the crypto markets, Frasca said the approach is designed to minimize risk. counterparty risk – which industry participants say is most always on the mind of traditional institutional investors looking to do their due diligence on digital asset strategies.
The fund is entirely denominated in US dollars. Returns are split between dollar-focused projections and coin accumulation. At launch, sponsors can only contribute in fiat, but COSIMO plans to add the ability to invest through in-kind staked assets down the line.
The team, including Frasca, has deep experience in traditional derivatives trading, as well as digital assets and internet-oriented startups.
“We got a lot of excitement from big institutions, pension fund guys who want to be in crypto, but don’t want to call the bottom,” he said. “They know they want to be in the market, but need to be protected.”
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