Alpha Drop: A Look at Polychain Capital’s Crypto Portfolio

Polychain Capital, a blockchain asset investment firm that backs projects at various stages of development, continues to add decentralized finance (DeFi) projects to its growing crypto portfolio.

Polychain has now invested in Series A and Series B funding rounds for decentralized margin trading platform dYdX. The platform raised $10 million in its Series B round, according to Coindesk.

Last month, crypto analyst and trader Tyler Swope predicted that dYdX may potentially launch its own token and execute an airdrop.

Polychain also invested in KeeperDAO’s (ROOK) recent seed funding round.

KeeperDAO is an on-chain liquidity underwriter that helps miners exact more profit from confirming transactions.

In addition to dYdX and KeeperDAO, the crypto venture firm has also invested in a long list of crypto assets and projects, according to Messari.

• Bitcoin (BTC)
• Ethereum (ETH)
• Polkadot (DOT)
• Tezos (XTZ)
• Cosmos (ATOM)
• Maker (MKR)
• Compound (COMP)
• Filecoin (FIL)
• yearn.finance (YFI)
• Avalanche (AVAX)
• Zilliqa (ZIL)
• 0x (ZRX)
• Celo (CELO)
• Nervos Network (CKB)
• Orchid (OXT)

In a recent interview, Polychain Capital portfolio manager Sherwin Dowlat peeled back the curtain on the firm’s investment strategy.

“I would categorize it as a holistic approach to investing and supporting the crypto ecosystem. It’s not just our liquid hedge fund that holds the coins there’s a lot more to it. It’s a pretty holistic overview of investing in the whole life cycle of these coins and the networks. We have everything from like a genesis, our incubator, which is super, super early stage. We help companies that’s just a founder and an idea.

To the venture arm which is kind of like seed and maybe aid stage investments all the way through to when they’re actually liquid coins trading out on the markets. And then we actually have pretty active staking. We actually support the networks with bootstrapping the staking when they launch. Tezos, Cosmos, Polkadot, these types of networks supporting them pretty natively.”

As for how Polychain decides to invest in liquid assets, Dowlat says that because they look for unique and undervalued projects that are solving important problems.

“When we invest in [assets], we hold them for quite a long time… When it’s adding them to the liquid portfolio, I think the most important thing that I actually think about when we’re chatting on how to weigh it or what to add or decrease our position size, it’s just knowing what time frame we’re on…

In the short term in crypto you have a lot of sentiment and narrative-driven movements which will either heavily discount something you could really like in the long term… So we have to go against a lot of those movements. It’s mostly just investing in networks that we otherwise couldn’t get… and solve for pretty big problems.”

Featured Image: Shutterstock/GrandeDuc