DWF Labs invests $75 million in Decentralized Finance, with dark pools and on-chain credit becoming new focal points.

Crypto Assets market maker DWF Labs announced the launch of a proprietary DeFi investment fund with a scale of up to $75 million, focusing on innovative projects that address structural issues such as liquidity, Settlement, credit, and on-chain Risk Management. The fund will focus on mainstream public chains such as Ethereum, BNB Chain, Solana, and Base, with particular attention to emerging areas like dark pool perpetual DEX and on-chain currency markets. This contrarian layout comes at a time when the crypto venture capital market is in a downturn - in the first half of 2025, the number of financing transactions halved year-on-year to 856, demonstrating DWF's strategic confidence in the institutional transformation stage of DeFi.

DWF Labs Fund Strategic Direction: Targeting Next-Generation DeFi Infrastructure

Andrei Grachev, co-founder and managing partner of DWF Labs, clearly stated that the new fund will focus on investing in founding teams that “solve structural real problems rather than existing protocol incremental variants.” This investment philosophy reflects the current trend in the DeFi market shifting from rapid growth to refined operations, especially against the backdrop of institutional capital gradually entering the market, where the demand for infrastructure capable of supporting trading scale, order flow protection mechanisms, and sustainable revenue generation is becoming increasingly prominent. Unlike the previous cycle from 2021 to 2022, where a large amount of capital chased meme coins and simple yield farms, this round of investment has clearly shifted its focus to infrastructure layers with real technological barriers and institutional-grade product experiences.

From the perspective of specific investment areas, the fund will focus on four major directions: dark pool perpetual decentralized exchanges, on-chain money markets, fixed income products, and interest-bearing asset tools. These tracks share the common feature of effectively addressing the core pain points faced by institutional traders when entering the DeFi ecosystem—such as lack of block trading capability, excessive price slippage, and insufficient compliance risk control. It is particularly worth mentioning the dark pool DEX, which is becoming a key entry point for institutional funds to engage in on-chain trading, allowing for anonymous matching of large buy and sell orders without publicly disclosing quotes and volumes. The Black Ocean dark pool project previously supported by Grachev is an early exploration in this field, aiming to achieve the ideal effect of large trades without impacting public market prices.

In terms of public chain selection, the fund clearly prioritizes the ecosystems of Ethereum, Solana, and BNB Chain, while maintaining a follow on emerging Layer 2 networks like Base. This strategic layout reflects DWF's realistic judgment on market liquidity distribution—according to DefiLlama data, as of September 2025, these three public chains account for nearly 75% of the total locked value in the entire DeFi ecosystem. However, Grachev also emphasized that the fund remains flexible and does not rule out investing in projects with breakthrough innovations in other crypto ecosystems, as long as these projects can demonstrate at least a minimum viable product and address real market needs.

DWF DeFi Investment Fund Core Information

Fund Size: 75 million US dollars

Investment Stage: Projects must at least have an MVP product.

Key sectors: Dark Pool DEX, on-chain currency market, fixed income products, risk management tools

Target public chains: Ethereum, BNB Chain, Solana, Base

Investment Philosophy: Addressing structural issues of liquidity, settlement, credit, and on-chain risk management.

Fund Type: Proprietary Fund (not accepting external investors at this time)

DWF Market Background: The Deep Logic of Counter-Cyclical Layout

(Source: The Block)

DWF chooses to launch a special fund during the current market downturn, backed by thoughtful strategic considerations. According to data from The Block Research, the number of financing transactions for global crypto asset startups in the first half of 2025 was only 856, a significant decline of 55% compared to 1933 transactions in the same period last year, marking the lowest level since 2020. This market environment increases investment risks but also significantly lowers project valuations, providing a golden window for strong investment institutions to select优质布局. Grachev bluntly stated: “The current market is an ideal time to support exceptional founders and accelerate the next wave of builders.”

From the perspective of industry cycles, the DeFi market is undergoing a critical transformation from retail-driven to institutional-driven. After a deep adjustment in 2022-2023 and a gradual recovery in 2024, most of the projects that have survived in the market possess healthier economic models and more sustainable product-market fit. At the same time, traditional financial institutions' exploration of on-chain financial infrastructure has clearly accelerated from 2024, with institutions like JPMorgan and Goldman Sachs launching various blockchain settlement and asset tokenization experiments. This institutional trend is the fundamental logic behind DWF fund's focus on positioning in dark pool trading and the on-chain credit market—building a “highway” for the impending flood of institutional capital.

Another key background is the gradual clarification of the regulatory environment. Although DWF itself has been questioned due to its opaque company structure, the regulatory framework for cryptocurrencies in major global financial markets is accelerating. The approval of Bitcoin spot ETFs by the U.S. SEC, the implementation of MiCA regulations by the EU, and the issuance of virtual asset service provider licenses in Hong Kong are a series of regulatory advances that have cleared major obstacles for institutional funds to allocate large-scale crypto assets. In this context, regulatory-compliant institutional-level DeFi infrastructure naturally becomes the next hotspot for capital pursuit, and DWF's $75 million fund is an early bet on this trend.

DWF's Unique Positioning: The Dual Role of Market Maker and Venture Capitalist

As one of the most active market makers in the Crypto Assets field, DWF Labs positions its new fund as a multi-layered support platform “to provide founders with an unfair advantage.” The company's official website clearly states that its services “go beyond strictly market making and/or investment,” extending to comprehensive support such as assisting exchanges in listing coins, marketing, legal consulting, and Liquidity guidance. This dual role of “investment + market making” has raised concerns among some industry observers about potential conflicts of interest, but it indeed provides invested projects with practical resources that traditional venture capitalists find difficult to match.

From the perspective of trading execution capability, DWF claims to provide spot and derivatives market-making services on more than 60 centralized and decentralized exchanges, covering a variety of tokens both inside and outside the portfolio. This extensive exchange coverage and deep liquidity management experience are of immense value to early DeFi projects—many technologically innovative projects ultimately fail due to a lack of initial liquidity and market attention. By collaborating with DWF, these projects can gain professional market-making support right from the product launch stage, avoiding issues of severe price fluctuations or poor trading experiences caused by insufficient liquidity.

However, the controversial nature of this model cannot be ignored. Previously, DWF was not a licensed financial institution in most jurisdictions and typically conducted business through entities in the British Virgin Islands and Singapore. Its numerous over-the-counter (OTC) transactions have also faced criticism, being viewed by industry observers as a way for token projects to sell their treasury holdings under the guise of cooperation or investment. In response, Grachev stated that the company is committed to “fair, well-functioning markets and operates under this principle at all times,” while acknowledging that it has not always adopted “ideal” practices before the end of 2023, but is working to “obtain multiple licenses and undergo audits.”

Regulation and Transparency: Old Issues and New Challenges

The opaque corporate structure of DWF Labs has been a focal point of concern in the industry. Unlike traditional market makers in the financial markets, who typically separate their market-making activities from their venture capital business with strict firewalls, there is a clear synergy between DWF's two business units, which naturally raises questions about information asymmetry and conflicts of interest. Especially in its frequent OTC transactions, it is difficult for outsiders to distinguish between genuine strategic investments and transactions that are merely disguised sales of treasury assets by project parties. This ambiguity is particularly concerning during bear markets, as many project parties face severe financial pressure.

In response to these questions, Grachev adopted a strategy of partially acknowledging the issues and promising improvements during the interview. He mentioned that the company is actively “obtaining multiple licenses and undergoing audits,” which may be specific commitments to enhancing regulatory compliance and transparency. From the perspective of industry development trends, as the crypto assets market matures, regulatory compliance has become a fundamental prerequisite for institutional capital entry. If DWF wants to truly seize the historical opportunity of institutionalization in DeFi, it must make substantial improvements in transparency and compliance management; otherwise, it will be difficult to gain the trust and cooperation of large institutional investors.

Notable positive signals include DWF's recent actions that show signs of aligning with mainstream finance. In April 2025, the company established a strategic relationship with the Trump family's crypto project World Liberty Financial, including a $25 million investment in WLFI governance tokens and providing liquidity support for World Liberty's USD1 stablecoin. In the same month, the company opened an office in the SoHo neighborhood of New York City, and these initiatives may be related to its strategy of enhancing regulatory image and approaching mainstream financial centers. As the crypto industry gradually moves from the margins to the center, this trend of “re-intermediation” is almost inevitable, and DWF clearly aims to seize a favorable position in this process.

Why the New DWF Fund is Important: Accelerating the Institutionalization of DeFi

The $75 million DeFi special fund launched by DWF is likely to become an important catalyst for accelerating the institutionalization of DeFi. According to Grachev, “DeFi is entering its institutional phase,” a judgment that aligns with data from several industry research institutions. A CoinShares report shows that in the second quarter of 2025, institutional investments in crypto products increased by 87% quarter-on-quarter, with DeFi-related products starting to gain significant allocation. The influx of institutional funds will not only change the capital structure of the DeFi market but will also promote a comprehensive upgrade of product design, Risk Management, and compliance standards.

From the perspective of the competitive landscape, DWF's initiatives may trigger a wave of similar special fund establishments. Traditional financial giants like BlackRock and Fidelity have already ventured into the crypto assets market through Bitcoin spot ETFs, and the next phase will naturally shift focus to the DeFi sector, which has greater revenue potential. Meanwhile, native crypto venture capital firms such as Pantera Capital and Polychain Capital are also actively adjusting their investment strategies to increase their focus on infrastructure projects. With its unique market-making resources and trading execution capabilities, DWF has a differentiated advantage in this competition, particularly in helping projects achieve a breakthrough in liquidity from zero to one.

From the perspective of technological evolution trends, the dark pool DEX and on-chain lending market that DWF focuses on indeed represent the next frontier of DeFi development. Dark pool trading addresses the needs of institutional large trades, while the on-chain lending market is a key foundation for realizing truly decentralized fixed income products. As these infrastructures improve, DeFi will no longer be limited to simple spot trading and liquidity mining, but will gradually develop a complete matrix of financial products, including structured products, derivatives, and complex risk management tools. This transformation will not only expand the market size of DeFi but also deepen its integration with the traditional financial system.

DWF Labs' $75 million DeFi specialized fund has thrown a striking warm stone into the cold winter of the crypto venture market. Its strategic focus on institutional-grade infrastructure such as dark pool trading and on-chain credit has accurately captured the historical turning point of DeFi's evolution from retail frenzy to professional finance. Although the company's own transparency issues remain a focal point of market concern, this bold layout undoubtedly injects confidence into the entire industry — sowing seeds in the coldest season is precisely to reap in the next spring. As institutional funds slowly open their gates, the second revolution of DeFi has quietly begun, and the core of this revolution will no longer be simply chasing yields, but the reshaping and upgrading of financial infrastructure.