$100 Million Aussie Crypto Fund Manager Avoids DeFi But Still Makes 119% Returns

July 09, 2021, 1:00 PM AEST - 2 months ago

Melbourne-based crypto fund Apollo Capital has outperformed Bitcoin in its year-to-date profits, returning 119 percent compared to Bitcoin’s 19.96 percent YTD growth.

Apollo Capital manages more than A$100 million (US$75 million) and has a couple of key elements to its successful investment strategy:

1. Audited code is a must, and 2. Anonymous development teams are a no-no.

The fund focuses on established projects that have existed for over a year, with a preference for systems running on the well-established Ethereum blockchain. Apollo places importance on selecting only well vetted crypto projects where the code has been audited and deemed legit.

Trust and Traceability

These higher-calibre cryptos have earned their stripes on the blockchain and have a proven history of being trustworthy, whereas anonymous teams often cannot be traced or held accountable if and when it all goes wrong.

Taking these precautions ensures that any crypto Apollo puts its money into has a decent survival rate, lowering the risk of a project being rug-pulled, which is often seen in new crypto projects.

It’s all in the code. Recent DeFi failures such as WhaleFarm and Titanium are classic examples of what can happen with unaudited code. Both projects showed promise until they crashed quickly to zero.

Apollo prefers betting on reputable assets with strong utility such as Bitcoin and Ethereum, as well as newer kids on the block that show promising potential, such as Polkadot, Polygon and Solana.

Risk and Rewards of DeFi

DeFi is a high risk/high reward game, but if it seems too good to be true it probably is and noobs should beware. The most feared outcome for DeFi investors is that they will lose all their money.

The most common reason for a DeFi project going belly up is weaknesses in a contract’s code that leaves it open to exploitation by hackers. Sometimes these “hackers” are actually the project’s developers.

An all-too common scenario in DeFi is the dreaded “rug pull”, where the liquidity is essentially drained by the dodgy team (who remain conveniently anonymous). These faceless masterminds can make off with millions and there’s nothing you can do to get your money back.

The DeFi space is still very new and, as with all things in their infancy, there are always hiccups at the beginning. As we move forward, the demand for decentralised finance only grows stronger and it is coming to us faster.

Australia an International Leader in DeFi

Australian startups are leading the charge. The future of DeFi is perhaps one of the most exciting developments in the crypto space and once the crinkles are ironed out, these platforms could change the world and open up a fairer and more honest financial banking system.

If you are interested in DeFi investments, it is always advisable to be aware of the risks.

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