Digital Asset Capital Management

Blockchain is the most disruptive tech of a generation – DACM provides focused, transparent, and professionally managed investment into this novel asset class

[Richard Galvin @richwgalvin]

Great to be on stage yesterday with @jessicasmw Chris, @DTAPCAP and @ShiliangTang discussing The Great Reallocation in crypto capital markets. Discussion focused on the growth "tokenisation of everything" will bring to crypto rails and the liquidity boost that should drive across crypto platforms, the convergence of AI and crypto as trading bots and HFT strategies proliferate, and the differentiation we are starting to see between the price performance of sustainable, revenue-generating assets and the rest.

And if Dan's BTC and ETH 2026 price predictions are right I'll shout him and the rest of the panel chilli crab at next year's conference - the least I can do.

#token2049

[Luna PR @LunaPRofficial]

And joining us in Singapore is @richwgalvin, Executive Chairman & Chief Investment Officer at @DigiAssetFund.

He brings an institutional investment perspective to the conversation around digital assets and capital allocation.

[Aero @aeroxyz]

DACM is a digital asset investment manager active across the crypto ecosystem through a fundamentals-first lens.

The @DigiAssetFund Liquid Venture Fund has market-acquired AERO and locked its position as veAERO, voting weekly to earn its share of fees.

[Richard Galvin @richwgalvin]

Crypto spot volumes look to be at, or near, a cyclical low so we think its an opportune time to research quality DEX tokens. This is a summary of our latest research piece on Aerodrome sent to LPs earlier this month. Note DACM funds own AERO. https://t.co/pDG3BV3vU0

[Richard Galvin @richwgalvin]

Always enjoy my discussions with Raoul - well timed too, plenty going on in crypto worth getting into.

As you might be able to tell from the discussion - my theme for the month is dont overthink it. Lot of easy things to buy in crypto atm if you have a thesis we are at or near a cyclical bottom. In my view you dont have to go too "exotic" to be well positioned as ZEC, NEAR, LIT and a few others are showing...

[Richard Galvin @richwgalvin]

Onchain volumes are at or near cycle lows in our view which makes the risk/reward in quality DEX tokens look asymmetric to us. A volume rebound to even the midpoint of the prior cycle would imply a material re-rating from here. A return towards 2025's highs (~3.5x July's monthly volume) leaves DEXs looking materially mispriced on our numbers, AERO included (which we own).

A volume rebound isn't a courageous call: a cyclical recovery + continued volume share migration from CEXs, newer venues and apps (Robinhood, FOMO for example) adding flow, and tokenisation of equities (as below) and other assets exponentially increasing the potential addressable market.

Only some of this needs to be partly right for DEX volumes to move materially higher from here.

[Richard Galvin @richwgalvin]

The best conference in crypto is back. Looking forward to being in Singapore and on stage again this year - lots to talk about!
🌶️🦀
#TOKEN2049

[Richard Galvin @richwgalvin]

One of the more straightforward theses in crypto over the next few years, is rebound in DEX tokens. Spot DEX monthly volumes have fallen from ~$600b in October to ~$130b in July and most of the DEX exchange tokens have fallen by similar or larger % amounts - their "beta" to volume is high.

This cycle looks much like the last one imo (see chart below), just off a higher base, as crypto structurally expands through the cyclicality and DEXs continue to take share from CEXs.

If you think crypto is in terminal decline move on...if not, it's hard to see DEX volumes not being materially - potentially magnitudes - higher than today over the next three years. In this scenario the beta is working for you to the upside.

The tailwinds: continued share gains from CEXs, TAM expansion through tokenisation (today's Coinbase tokenised equities launch on Aerodrome being a case in point), new entrants like Robinhood, and increasingly accommodative regulatory frameworks.

AERO is one that fits this thesis well and our funds hold it.

We've done a lot of work on DEX volumes and mkt dynamics and can share it with qualified investors.

[Richard Galvin @richwgalvin]

DACM is very fortunate to be an early investor in @risechain. Sam and the team have been first class - from making the early call to verticalise when the "build it and they will come" L2 road was overcrowded and increasingly leading nowhere, to assembling the right team to build-out the perps offering and then absolutely crushing it since launch.

It's been awesome getting to know Sam better and watching him consistently make the right decisions and, just as importantly, execute on them...whilst gathering users and revenue along the way!

[Richard Galvin @richwgalvin]

Really enjoyed the discussion with @sgoldfed, a genuine crypto OG with a career arc from Princeton's cryptography labs to co-founding Arbitrum - which continues to hold its place as one of the largest L2s.

We covered a lot, including L2s vs. mainnet and why Arbitrum's licensing model - one of the best designs in crypto imo - turns "forks" into contributors rather than competitors.

Insight from a key player helping to bring corporates like Robinhood onchain - enjoy 👇

@arbitrum
https://t.co/yoKeZoV1LJ

[Richard Galvin @richwgalvin]

Have to also confess to being POD maxis. In our view it's the strongest prospective AI-focused project in crypto - a proven incentive model looking to scale a network into an existing multi-billion dollar market that's compounding at triple-digit rates.

Fuller thesis to come in the next few weeks.

[Richard Galvin @richwgalvin]

Saylor making clear STRC is the favoured body atm - I think biggest concern is he appears to have made this decision because he still seems to want to keep issuing it. This seems dangerous but also potentially fanciful

[Richard Galvin @richwgalvin]

Guilty as charged! Although for full transparency I have a max subsciption...

I do think this will be an increasing trend as Claude et al democratize access to more sophisticated hft/quant strategies. Expect we see an exponential uplift in liquidity across markets with exchanges a key beneficiary.

Will also likely mean larger returns for the professionals as new entrants get cut-up but the tech will also see the formation of many new "professionals" as startup costs/team size requirements are dramatically reduced.

For me it also had the significant side benefit of giving me a much deeper understanding of Bullets backend and economics which, along with learning a bunch of new stuff, was the key objective.

[Richard Galvin @richwgalvin]

Saylor faces a three-body problem imo - he can't indefinitely support all of equity, BTC and the preferred/debt stack. The only real "fix" was a multi-year cash buffer but he seems incapable of sitting on that.

My guess is he protects BTC the most - for philosophical reasons and also its the most connected to the other two - but that takes a lot of capital from equity and/or pref if he can raise it.

At his size financial engineering miracles can happen...but its a material overhang for forseeable future.

Like a lot of operators with his character type, eventually they fly too close to the sun - but it's the same trait that got them that high in the first place.

[Yogita Khatri @Yogita_Khatri5]

🎉 Edition 52 of my newsletter, The Funding, is live!

Many thanks to Andy Martinez of @CIG_Crypto, @Ray_L1D, @RyanWatkins_, @richwgalvin, @AllBusinessPump, @sanatvc, and @LexSokolin for sharing insights 🙌

[Richard Galvin @richwgalvin]

https://t.co/JJsBZtfjRc

[Richard Galvin @richwgalvin]

Fair to say solana:CARDSccUMFKoPRZxt5vt3ksUbxEFEcnZ3H2pd3dKxYjp might be proving pmf

Gross profit of $1.8m...in a week...🧐

[Richard Galvin @richwgalvin]

Good, toughtful piece but think it's missing two things that push fair DeFi rates lower imo:

- Open global access of DeFi creates structurally captured demand. A LOT of stablecoins sit in non-KYC wallets that can't or won't onboard to TradFi yield - DeFi is their only option. That's largely price-insensitive supply compressing rates. IMO a bigger negative bar than any of the positive ones on Tom's chart

- DeFi has empirically been safer than centralised crypto credit in the same ecosystem (Genesis, Celsius, BlockFi). Instant liquidity, constantly verifiable collateral and non-negotiable, open-source liquidations have real value, proven "in production" across multiple cycles. Another negative bar against TradFi yields.

At 12%+ DeFi demand would be off the charts imo - my gut says 7-8% is fair "clearing price".

One question: isn't PD x LGD double-counting the oracle/gov/composability lines? Those are the loss events.

[Richard Galvin @richwgalvin]

When DACM launched our venture fund in mid-2018 it was near the bottom of the bear and a first-time crypto VC was a hard sell. So we built an evergreen structure -taking investors in over time as our track record spoke for itself.

We closed to new LPs in mid-2021 to cap the size, but the evergreen structure means we always have dry powder for the right opportunities.

We're still deploying - focused on early-stage, crypto-native projects. We particularly like to invest in what we use: onchain trading, lending, stablecoins, DEXes etc

We're still very much open for business!

[Richard Galvin @richwgalvin]

Apart from the growth and all of the points below...the other strength, from a pure portfolio perspective, is $SHFL is starting to trade like a casino stock does on the stock market - i.e. its one of the only "defensive" tokens that exists providing somewhat uncorrelated performance (privacy coins starting to behave a little like this too but thats another topic). This is unfortunately very rare in crypto.

Not sure whether this is 1) market being sensible as SHFL and similar projects are "defensive" and, like casino stocks, it makes sense to trades like this 2) fact it is not on any centralised exchanges so escapes the headline-algos...probably a bit of both.