At bitcoin 2024 last July, Samara Alfa Management and bitcoin Pro Magazine selected boreala market-neutral DeFi hedge fund, as winner of this year's contest bitcoin Alpha Competition.
Boreal received $1 million in seed capital, as well as access to Samara's institutional-grade infrastructure to help manage its fund.
Boreal stood out for its trading strategy, which uses various DeFi protocols to generate returns in addition to US dollars, bitcoins, and ether.
“Even when things are super bearish, there is always a way to generate returns in DeFi,” said Boreal founder Evan Morris, who has been in the crypto space since 2016 and worked in traditional finance before that.
“I started in this space four years ago managing external money with two friends and then ended up joining a larger company as a portfolio manager where I ran a DeFi strategy for a few years. Most recently, I launched Boreal and now, with the help of Samara, we can really take things to the next level,” he added.
Adil Abdulali, chief investment officer at Samara Asset Management and one of the contest judges, discussed why Samara is excited to partner with Boreal.
“Evan is someone who has a very good track record and the right risk framework for this type of strategy,” he said. “He has commercial maturity and since crypto is a young market, someone with several years of experience in DeFi is rare.”
Abdulali also shared details about how Samara plans to support Morris.
“We thought if there was a way to get it up and running quickly with all the infrastructure like administration, auditing, accounting, underwriting documents, a bank account, BitGo accounts, etc., all of which we have, then let's do it.” said.
DeFi on bitcoin
Going forward, Morris sees bitcoin playing a much bigger role in the DeFi space.
“With the arrival of bitcoin on the DeFi scene, we can do some of the same things we were able to do with stablecoins in recent years,” he said.
“DeFi 1.0 was heavily based on USDC and Tether, but the future of DeFi will involve different types of wrapped bitcoins and bitcoin derivatives. And we are happy to provide liquidity.”
Abdulali also believes that bitcoin will play a larger role in DeFi, and his company is well positioned to help Boreal capitalize on this.
“bitcoin is not like all other currencies: it is one of the best collaterals out there,” he said.
“We use bitcoin in our bitcoin-denominated fund, which we started over a year ago and which employs essentially the same type of strategies as our dollar-denominated market-neutral fund. However, the fund transacts entirely in bitcoins,” he added.
“The idea is to use bitcoin in these new DeFi protocols like Babylon in market making strategies rather than putting collateral like USDC or USDT on an exchange.”
The future of DeFi
Morris explained that DeFi has become much more advanced than four years ago, when it first emerged as a crypto sector.
“There are many more tools to receive alerts about smart contracts and evaluate the security of smart contracts,” he said.
“Cybersecurity and wallet technology are also much better. “This enables institutional-grade DeFi products,” he added.
And Abdulali wants Boreal to take advantage of this institutional-grade DeFi before the institutions arrive.
“All this new institutional capital won't even touch DeFi for a while,” Abdulali explained. “They have barely entered bitcoin, so it will be a long time before the DeFi landscape becomes saturated and there is too much capital,” he added.
“There will be juicy returns for some of us who are willing to play in the space now.”
