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.
Wave Digital Assets
Lending
Liquidity Mining
Stablecoins
Potential Future of Cardano DeFi
Prominent and flourishing dApps ecosystem across various DeFi sub sectors and verticals
Increased institutional exposure and investment within DeFi protocol liquidity and lending pools
Increased retail participation across the Cardno DeFi ecosystem
Notable increase in TVL with high DeFi functionality and efficiency
Sources of Yield Overview
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
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 decentralizedfinance. Therefore every actor isexposed to movements in the market prices of those assets.
Additionally, since yield is paid out in wrapped or native tokens, the value of your yieldmay decrease if theunderlying token prices drop.
Impermanent loss
Occurs when one side of the pair decreases in value compared to the other side, leaving theliquidity provider holdingmore 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 asImpermanent loss. The higher the volatility of an asset, the higher the potentialimpermanent loss risk. This is onereason 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 ofliquidators not capturingliquidation opportunities in a timely manner, or low market liquidity of the principal assetto be repaid.
Systems & Technology Risks
Smart Contract
The daily operation of decentralized capital markets are autonomously and deterministicallydictated by the codebases ofeach platform and the integrations between platforms.
Coding flaws can be exploited by bad actors at will, with little to no recourse available tovictims.
Design & Incentive
The underlying digital ledger technology, and added features such as scaling technologies,rely on complexgame-theoretic incentive designs. Flaws in the incentive design can skew operationaloutcomes.
Liquidation
Risk of the Oracle system not properly updating prices in case of extreme market downturnand network congestion; riskof 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 thatborrowers may not be able to payback their loans.
Lenders can lose a significant portion of their assets if DeFi protocols do not properlyprotect against a mass defaulton loans.
Governance Risk
Most decentralized applications operate according to the wishes of tokenholders (thinkdirect democracy corporategovernance by shareholders). Anyone can propose any course of action, which is then votedupon.
Proposals can address nearly anything, including core operational tenets of the application,changes to risk metrics, orextending/ending promotional rewards.
Stablecoin Specific Risks
When trading stablecoin pairs, if one of the stablecoins in a pool goes significantly downbelow the peg of 1.0 andnever returns to the peg, it will effectively mean that pool liquidity providers hold almostall their liquidity in thatcurrency. Please check out our Stablecoin Research Paper for more information on theserisks, https://wavegp.com/stablecoin-research/
Regulatory Risks
The regulatory environment surrounding these assets continues to develop and there are risksnew legislation may impactthese assets.
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Invest in the Wave WAY Fund
get started*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.
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
Learn MoreInvestment Funds
Wave’s investment team draws on decades of asset management expertise to offer actively-managed strategies.