WAY Fund

Wave ADA Yield (WAY) Fund

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The WAY fund is designed to target yields in excess (relative to ADA)

Wave ADA Yield Fund (“WAY”) is a DeFi liquidity fund designed to support the new decentralized exchanges, lending protocols, and stablecoin issuers building on Cardano*. Each of these decentralized applications adds to the strong foundation of the ADA blockchain as it realizes a fully functional and diverse ecosystem.

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Lending

Liquidity Mining

Stablecoins

Potential Future of Cardano DeFi

01

Prominent and flourishing dApps ecosystem across various DeFi sub sectors and verticals

02

Increased institutional exposure and investment within DeFi protocol liquidity and lending pools

03

Increased retail participation across the Cardno DeFi ecosystem

04

Notable increase in TVL with high DeFi functionality and efficiency

Sources of Yield Overview

Source of Yield- Liquidity Mining
Source of Yield- Liquidity Mining

Decentralized Exchanges (DEX) are set up without market makers, and instead with two pools of assets that represent each side of a trading pair.

This creates a liquid pool of assets to trade against. DEXs rely on Automated market makers (AMMs) to facilitate the transactions between assets within a smart contract pool.

Source of Yield- DeFi Lending
Source of Yield- DeFi Lending

Decentralized lending protocols are fully transparent, permissionless applications built on the blockchain using smart contracts.

Risk Factors

Market Risks

Market Risk

Blockchain-native assets make up the vast majority of collateral across decentralized finance. Therefore every actor is exposed to movements in the market prices of those assets.

Additionally, since yield is paid out in wrapped or native tokens, the value of your yield may decrease if the underlying token prices drop.

Impermanent loss

Occurs when one side of the pair decreases in value compared to the other side, leaving the liquidity provider holding more of the lower-value asset and thereby losing out on gains in the higher-value asset.

This imbalance can correct if the assets in the pool revert to their previous price parity, which is why it’s known as Impermanent loss. The higher the volatility of an asset, the higher the potential impermanent loss risk. This is one reason that the fund will only deploy with stablecoin as they’re a lower volatility asset.

Liquidation

Risk of failure of an asset that is being used as collateral on the protocol; risk of liquidators not capturing liquidation opportunities in a timely manner, or low market liquidity of the principal asset to be repaid.

Systems & Technology Risks

Smart Contract

The daily operation of decentralized capital markets are autonomously and deterministically dictated by the codebases of each platform and the integrations between platforms.

Coding flaws can be exploited by bad actors at will, with little to no recourse available to victims.

Design & Incentive

The underlying digital ledger technology, and added features such as scaling technologies, rely on complex game-theoretic incentive designs. Flaws in the incentive design can skew operational outcomes.

Liquidation

Risk of the Oracle system not properly updating prices in case of extreme market downturn and network congestion; risk of the Oracle system not properly submitting prices, causing improper liquidations.

Credit Risks

Counterparty Risk

When a DeFi platform lends out assets to other DeFi protocols, there is a risk that borrowers may not be able to payback their loans.

Lenders can lose a significant portion of their assets if DeFi protocols do not properly protect against a mass default on loans.

Governance Risk

Most decentralized applications operate according to the wishes of token holders (think direct democracy corporate governance by shareholders). Anyone can propose any course of action, which is then voted upon.

Proposals can address nearly anything, including core operational tenets of the application, changes to risk metrics, or extending/ending promotional rewards.

Stablecoin Specific Risks

When trading stablecoin pairs, if one of the stablecoins in a pool goes significantly down below the peg of 1.0 and never returns to the peg, it will effectively mean that pool liquidity providers hold almost all their liquidity in that currency. Please check out our Stablecoin Research Paper for more information on these risks, https://wavegp.com/stablecoin-research/

Regulatory Risks

The regulatory environment surrounding these assets continues to develop and there are risks new legislation may impact these assets.

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Invest in the Wave WAY Fund

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*The material provided herein does not constitute an offer to sell or a solicitation of an offer to buy any interest in the Fund or any other securities. Any offering of a Fund will be made only in accordance with the terms and conditions set forth in the Fund’s private placement memorandum or similar document (Offering Materials) Please see IMPORTANT DISCLOSURES provided at the end of this presentation.

**WAVE DIGITAL ASSETS LLC IS REGISTERED WITH THE US SECURITIES & EXCHANGE COMMISSION AS AN INVESTMENT ADVISER, CRD 305726. PLEASE SEE THIS SITE FOR MORE INFORMATION, OUR DISCLOSURE BROCHURE AND OUR RELATIONSHIP SUMMARY HTTPS://ADVISERINFO.SEC.GOV/FIRM/SUMMARY/305726.

***FUND INTERESTS ARE SUITABLE ONLY FOR SOPHISTICATED INVESTORS FOR WHICH AN INVESTMENT IN THE FUND DOES NOT CONSTITUTE A COMPLETE INVESTMENT PROGRAM AND THAT FULLY UNDERSTAND AND ARE WILLING TO ASSUME THE RISKS INVOLVED IN THE FUND’S SPECIALIZED INVESTMENT PROGRAM. Certain criteria, including minimum financial status and experience may apply.

Services

Our team has deep institutional experience managing third-party capital across traditional and decentralized finance, in particular venture capital, derivative, lending, and staking expertise.

In addition, we have built strong relationships with institutional service providers leveraging our blockchain and digital assets network across the world.

Treasury Management

Wave’s Corporate Treasury Management services include digital asset lending programs and derivative strategies designed to capture additional yield and fine-tune risk, with a range of qualified custodians and counter-parties. Wave also operates across multiple DeFi protocols for lending, borrowing, trading, yield farming, staking, and mining. Wave applies our deep experience in digital asset strategies to bespoke risk managed portfolios. Wave Digital Assets is SEC regulated focused exclusively on digital assets, and have a fiduciary duty to protect our clients.

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Wealth Management

Your ultimate solution for digital asset portfolio management, combining custody, execution, and tailored investment strategies.

Wave Digital Assets is a leader and pioneer in digital asset investment management. We are focused exclusively on digital assets, our offering is designed to provide the ultimate all-in-one portfolio solution for corporate and individual investors, and we have taken steps to ensure that assets are secure, growing, and generating income.

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Protocol Inventory Management

Tokenized staking fund for your protocol. Programmable liquidity through fully-compliant global exchanges. We deal with all the administrative hurdles providing you the ease of use

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