$100M Wave Financial Fund Offers Liquidity to New Cardano DeFi Platforms

The fund, which will support new decentralized exchanges, lending protocols and stablecoin issuers, is building on the Cardano blockchain


Blockworks exclusive art by axel rangel


key takeaways

  • The Los Angeles-based company is in discussions with other protocols to launch similar products
  • Cardano’s market cap is roughly $38 billion — slightly less than Solana (SOL) and more than Terra (LUNA)

Wave Financial is launching a fund designed to offer liquidity for new DeFi platforms launched in the Cardano ecosystem.

The Wave ADA Yield Fund, which has launched with an initial $100 million, will support the new decentralized exchanges, lending protocols and stablecoin issuers building on Cardano. 

“Today we are launching what we believe is the first pure liquidity provisioning fund in crypto,” Wave Financial CEO David Siemer said in a statement Wednesday. “Each of these decentralized applications adds to the strong foundation of the Cardano blockchain as it realizes a fully functional and diverse ecosystem.”

Singapore-based EMURGO, ​​a founder of the Cardano protocols, supported the creation of the Wave fund, according to the news release. EMURGO in September launched a $100 million investment vehicle to invest into early startup and growth stage companies shaping the Cardano ecosystem.

Cardano (ADA) has the eighth-highest market capitalization among cryptoassets, according to data compiled by Blockworks. ADA’s market cap is roughly $38 billion — slightly less than Solana (SOL) and more than Terra (LUNA).

DEXs (decentralized exchanges) and DeFi (decentralized finance) lenders have gained the fastest popularity in terms of attracting users and capital, according to the company. The ADA Yield Fund will provide liquidity to the two pools of assets representing each side of a trading pair for Cardano DEXs.

Wave will also continue to support and expand staking pools to strengthen the Cardano network.

“Specific to Cardano, we were very impressed with the academic research that forms the foundation of the work that they are building, in a proof of stake consensus mechanism with a proper staking setup,” Benjamin Tsai, Wave Financial president and managing partner, told Blockworks. “With the launch of smart contract capabilities last year, the ecosystem is ripe for growth across DeFi, NFT, and other areas.”

The Los Angeles-based company manages more than $1 billion in assets. It offers a Wave BTC Income & Growth Digital Fund, which sells one-month call options backed by the bitcoin held in the fund, collects a premium from option sales, and passes that premium to investors in a monthly dividend. 

Wave Financial also has an early-stage crypto investment fund that has invested in blockchain companies, protocols and cryptocurrencies since 2018.

Siemer previously told Blockworks that he personally invests mostly in bitcoin, ether and cardano. The Wave Financial CEO also noted at the time that he was bullish about NFTs (non-fungible tokens), predicting that the space would grow 100 times over the next few years.

Tsai said the company is in discussions with a number of other protocols to launch products similar to the Cardano fund. It is also looking into offerings that are not protocol specific.

“One area of interest from the institutional client base which we speak with is DeFi and capturing attractive yields from the crypto market with minimal market exposure,” Tsai said. “This is something we are looking to package and offer soon.”

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