Hedge Fund MEV Capital Trying to Bring DeFi to the Masses

Just 1.4% of all crypto users are involved in DeFi, underscoring the difficulty of winning retail investors over to the opaque asset class.

DeFi-focused hedge fund firm MEV Capital is extending from its institutional roots to make a first-time play for retail investors. 

Gytis Trilikauskis, MEV’s chief operating officer and general partner, said the asset manager has incubated Amphor, a new decentralized finance (DeFi) protocol that incorporates a number of onchain vaults. 

Amphor’s aim is to employ algorithms and onchain tech solutions to simplify the many complexities of DeFi for the masses, with the startup pointing out to potential investors that just 1.4% of all crypto users are involved in DeFi. 

It accepts investments in bitcoin, ether, and USDC. 

“Basically, if you’re not in DeFi 24/7, and you’re not doing this on a constant basis, it’s very hard to orient yourself, because there’s so many points, so many underlying protocols, so, so many risks involved,” Trilikauskis said. 

There are some six million DeFi users, accounting for $98 billion total value locked (TVL), per Amphor research — dwarfed by crypto’s cumulative $2.3 trillion market cap and 420 million active users. 

Amphor’s strategy, which has no investment minimum, is designed to deliver market-neutral yield exposures, including via liquid restaking tokens (LRTs) on platforms such as EigenLayer. Amphor is a separate entity from MEV, which imposes $500,000 minimum investments on accredited investors. 

Read more: Eigen Foundation to Allocate an Additional $1,000 in EIGEN Tokens to Over 280,000 Users

“We think [Amphor] can solve a big headache for small players and those who want to allocate $5,000 or $10,000, but don’t have more,” Trilikauskis said, adding that “we have the track record…and relationships with those underlying protocols at the end of the day.”

Amphor’s Core Strategies

One of Amphor’s two core products employs what the operation is calling an “LRT Omni-vault” that provides automated restaking exposure over EigenLayer. A number of counterparties are involved, including Pendle, Uniswap, Curve, and Balancer. 

The second product creates a token based on vaults that Amphor runs. Those tokens, dubbed LP tokens, are employed as collateral to short ether (ETH) perpetuals on the CME and centralized crypto exchanges. The aim is to hedge and generate yield. 

And there’s a plan to become involved on EigenLayer not just in a restaking capacity, but also to operate its AVS nodes, which are equivalent to validators on the network.  

There are also integrations in place to capture points across various projects, automatically converting those points into crypto assets over time. Amphor aims to be chain-agnostic. 

More than 80 crypto angel investors chipped into the seed round for Amphor, according to marketing materials. The startup closed on a $4 million seed round, saying the fresh capital would be earmarked to add to the project’s team, as well as build out its tech stack, plus expansions to additional blockchain networks. 

The emerging protocol attracted about $25 million in TVL for its imminent public debut.