Crypto market maker DWF Labs’ fund has been earmarked for dark pool DEXs, decentralized money markets, and yield-bearing products.
Crypto market maker and Web3 investment firm DWF Labs says it is investing up to $75 million in decentralized finance projects that could support institutional adoption.
The firm shared its announcement via X on Wednesday, saying the fund will support projects with “innovative value” propositions that can scale to support large-scale adoption.
“The initiative will target blockchain projects building dark-pool perpetual DEXs, decentralized money markets, and fixed-income or yield-bearing asset products, […] areas the firm believes are poised for major growth as crypto liquidity continues its structural migration onchain,” DWF Labs said.
As part of the announcement, DWF Labs managing partner Andrei Grachev emphasized the importance of building DeFi infrastructure “with real utility” that can support institutional demand.
“DeFi is entering its institutional phase,” he said, adding: “We’re seeing real demand for infrastructure that can handle size, protect order flow, and generate sustainable yield.”
The fund will focus on projects built across Ethereum, BNB Smart Chain and Solana, as well as Coinbase’s Ethereum layer-2 Base.
Alongside capital injections, DWF Labs will also offer support in ways such as “TVL and crypto liquidity provisioning, hands-on go-to-market strategy and execution support,” access to partnered exchanges, market makers, infrastructure providers and institutions in crypto.
DeFi’s future potential
At the time of writing, there is currently over $120 billion worth of total value locked across all DeFi projects as per DefiLlama data.
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It reached its peak back in “DeFi Summer” of 2021, at around $175 billion, and also recently almost climbed back to that high again last month, after circling $166 billion before the Oct. 10 market crash.
Despite DeFi initially being a niche area designed as a decentralized alternative to traditional finance, some believe that centralized institutions will play a key role in helping the sector go mainstream.
Speaking with MN Capital founder Michaël van de Poppe in a video published to YouTube on Tuesday, Chainlink co-founder Sergey Nazarov said that “I think we’re about 30% of the way there.”
Nazarov predicted DeFi to hit 50% mass adoption when the regulatory climate is clear, and 70% when the infrastructure and technology are simple and efficient enough for institutions to tip their capital and client funds into DeFi.
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