• Blockforce Capital would invest in Vesper growth pools under terms of partnership
  • 25% of management fees from Blockforce are to be sent back to Vesper token holders for distribution

In the last year, decentralized finance (DeFi) protocols have produced some eye-watering gains, but many investors have been left on the sidelines as they don’t have the knowledge or confidence to buy-in to the ecosystem.

A DeFi platform known as Vesper Finance has changed this by partnering with Blockforce Capital — a traditionally structured hedge fund familiar to many accredited investors — to offer the fund’s investors exposure to Vesper’s token. 

Holders of the governance token for the DeFi ecosystem Vesper voted Sunday to authorize an alliance between the platform and hedge fund Blockforce Capital. The alliance will allow investors in the fund gain access to Vesper’s growth assets while giving Vesper pool participants a dividend from Blockforce’s management fee. 

DeFi confidence booster

“Our investors don’t want to have to deal with all of those decisions and risks of owning and managing all of this process,” Eric Ervin, CEO of Blockforce Capital said to Blockworks. 

“There’s a lot of operational risk when you are an asset manager. A platform like Vesper is that first step. Vesper will be one of the first DeFi platforms that will enable investment advisors, family offices, and others to come in and have the confidence to invest.”

According to a proposal, Blockforce Capital intends to create a new fund which will “seek to achieve superior risk-adjusted returns by investing in digital assets and enhancing those returns by participating in Vesper pools, owning and staking VSP [Vesper’s liquidity token], and to a lesser extent, providing liquidity on decentralized exchanges for VSP.”

Effectively, Blockforce is building a regulatory compliant “wrapper” that creates a compatible interface between traditional finance — investment in the funds — and DeFi.

Demystifying DeFi

While other funds have bought into DeFi projects, many are VCs doing so as an infrastructure play akin to buying equity in a startup.

In contrast, Blockforce and Vesper are giving Blockforce’s traditionally-minded investors exposure to the double-digits trading returns that have come to define DeFi. 

Holdings of the fund will be split amongst volatile growth assets like the VSP token, Ethereum, and bitcoin as well as stablecoins such as USDC. 

‘Vespernauts’, a nickname for holders of the Vesper token, also authorized a remittance of $100,000 to Blockforce Capital in order to help establish the fund and work with lawyers to ensure that it’s regulatory compliant. 

“Everybody wants to have something in [DeFi], but nobody understands it. The $93 trillion of managed funds from Registered Investment Advisors and asset managers that don’t quite know what this means and how this works,” Ervin said during a presentation to Vesper token holders.

“Vesper does something for that whole ecosystem which simplifies it and brings it down to the base nature of ‘hey, it doesn’t have to be complicated’.

Want to learn more about DeFi? Check out our Investor’s Guide to DeFi.

  • Blockworks
    Sam Reynolds is a Taipei-based reporter, covering digital assets and regulation throughout Asia. Before joining Blockworks he was an editor at Forkast News and an analyst with IDC.