Friday, October 7, 2022

Virginian county wants to put pension funds into DeFi yield farming

The Northern Virginia county of Fairfax has already invested part of its pension funds in crypto and blockchain startups. Now, it is mulling over deeper involvement with decentralized finance (DeFi) yield farming.

The Fairfax County Police Pension System’s chief funding officer Katherine Molnar said on Tuesday on the Milken Institute World Convention that the system goals to fund two new crypto-focused hedge fund managers within the subsequent three weeks. The following few days will see a choice made, which, if accepted, can be the primary time pension fund cash was utilized in DeFi.

In accordance to Molnar, Fairfax has already dedicated pension funds to seven crypto allocations throughout two pension funds, together with enterprise capital funds and one construction that holds early-stage illiquid tokens and later-stage liquid tokens. A special method to revenue from volatility is likely one of the seven classes. It features a hedge fund that employs numerous strategies in cryptocurrency, together with yield farming, foundation buying and selling and cross-exchange arbitrage.

Fairfax County isn’t any stranger to the blockchain and cryptocurrency sector. In 2019, it started investing pension fund cash in cryptocurrencies, with projected returns of 9%. Fairfax’s crypto property account for about 8% of its portfolio in whole.

The manager issued a press release concerning the company’s blockchain-related investments, noting that it had invested within the Morgan Creek Blockchain Alternatives Fund. The Staff’ Retirement System (ERS) dedicated to investing $10 million, whereas the Police Officers Retirement System (PORS) pledged $11 million. Molnar likened yield farming to a fixed-income alternative or a possibility for the next return than rate-sensitive property.

Associated: Australia’s Rest Super retirement fund to invest in crypto for its 1.8M members

America took first place on the 2021 World DeFi Adoption Index. The index tracks nations with the best grassroots adoption. To a far larger extent, DeFi uptake is robust in high-income nations that have already got a big cryptocurrency use, notably amongst merchants and institutional investors. The doorway of Fairfax into the market solely enhances the case for US’ DeFi adoption.