Defiance Capital is a venture capital affiliated to Three Arrows Capital, a crypto hedge
fund based in Singapore. Three Arrows Capital was launched in 2012 but as of June of 2022, it was ordered to liquidate its assets by a court. This was due to its unsatiable affinity for borrowing funds to finance its trading operations, a habit that led the firm to file for bankruptcy in 2022. At the time of its liquidation, it owed $3.5 billion to its creditors.
Defiance capital has on the other hand primarily invested in web3 and crypto. It has funded many successful products in decentralized finance and the web3 gaming market place. Some crypto projects that have received financial backing from Defiance Capital include Infinity, Aave, Layer Zero and Offchain Labs among others. The firm enjoys services from a general partner, April Henry, who has vast experience in building investments in tech companies across Europe and North America. Her 20-year experience has earned her a good reputation in the sector.
According to sources with intimate knowledge on the matter, Defiance Capital has recently raised $100 million for its new liquid token and has already closed the first phase of the new fund. This data was also backed up by tweets from the company and its co-founder, Arthur Cheong. Since its inception in 2020, the firm has funded numerous investments across decentralized finance and web3 gaming industries. However, the venture capital hit turbulence when its affiliate Three Arrows Capital filed for bankruptcy, an event that caused Defiance Capital to distance itself from the troubled hedge fund and claim independence in its operations. The firm also claims it had no access to the financial statements from Three Arrows Capital. This inaccessibility to financial data left Defiance Capital in prejudice and its assets were as a result affected by the bankruptcy filing. However, by September last year, Defiance Capital had launched another effort to raise $100 million for a new liquid venture fund and had managed to raise half of the targeted amount at the time.
Having met its target, Defiance Capital is now joining other venture capitals in offering liquid tokens. This sector in the crypto industry revolves around providing on-chain liquidity protocols rather than depending on centralized finance systems to offer the same facility. This is an effort by stakeholders to ensure purity in blockchain ecosystems by offering blockchain solutions to problems in the industry. According to other ventures in this sphere like Pantera Capital and Bancor, this liquid token is similar to a smart contract and automatically regulates buying and selling of digital assets following a certain price curve that is already predetermined. This contract is set to offer many benefits among them ensuring price stability by backing up its trade operations from a single pool of collateral. The extent of stability is determined by the amount of reserve in liquid tokens. The higher the reserve, the more stable the prices.
The ability to offer trading in crypto with liquid funds that back their digital assets is a new market that has seen many investors take interest. This is because, with collateral to backup trading activities, investors are cushioned from any fallouts in the crypto market. This new mechanism could form a new basis to convince more people to adopt the crypto technology. What are your thoughts on this subject?
