The Long/Short Fund is one of DEFILP's most advanced and strategically focused investment vehicles. Designed to capitalize on the volatility of crypto markets, this fund uses sophisticated AI trading agents to actively take long or short positions on assets—primarily Bitcoin—through perpetual derivatives protocols. The goal is to deliver high-performance returns while maintaining strict capital protection through decentralized governance and smart contract-enforced controls.
Funding Derivatives Trading Agents
Why Long/Short with AI Agents?
Market volatility is not a threat—it’s an opportunity. The Long/Short Fund is built to exploit inefficiencies in the crypto derivatives market by using advanced AI-driven trading agents. These agents dynamically shift between long and short positions on assets like Bitcoin, reacting in real time to trends, momentum shifts, and on-chain data. The goal is simple: preserve capital in downturns and multiply gains in uptrends.
What We Trade The Long/Short Fund actively engages with:
Perpetual Derivatives: Instruments that track crypto prices with no expiry, allowing both long and short positioning.
High-Volume Assets: Primarily BTC and ETH, with select exposure to major altcoins depending on liquidity.
Multi-Protocol Coverage: Trading strategies deployed across top-tier decentralized perpetual platforms to access the best fees, funding rates, and execution.
AI Trading Agents Our edge lies in sophisticated agents built in-house, using:
Mixture of Experts MoE: Specialized models for trend detection, mean reversion, macro shifts, and funding rate exploitation.
Swarm Architecture: Multiple agents work in coordination, voting on directional bias and risk allocation.
Real-Time Chain of Thought CoT: Each trade is reasoned through multi-step logic before execution.
Reinforcement Feedback Loops: Agents evolve through continuous learning, adapting to changing market regimes.
Investment Thesis We believe:
Volatility is predictable through microstructure data, trader positioning, and reflexive feedback loops.
Asymmetric gains can be captured through leverage when applied strategically and selectively.
Autonomous agents can outperform discretionary trading over time due to speed, consistency, and cognitive scalability.
Deposit Period
The 30-day deposit period is a crucial phase in the investment cycle of the fund, designed with strategic intent to manage and allocate capital efficiently. This limited timeframe for contributions serves multiple purposes, ensuring that the fund's operations commence with a solid foundation and a clear investment trajectory. Here's a deeper dive into the significance of this deposit window
Strategic Fund Allocation
Timely Capital Assembly
The deposit period allows the fund to gather capital within a defined timeframe, setting the stage for subsequent investment actions. It ensures that the fund has a clear picture of available resources before making investment commitments.
Investment Readiness
A concentrated deposit window aligns with the fund's strategy to be agile and responsive to investment opportunities. By knowing the exact amount of capital at its disposal early on, the fund can swiftly engage in opportunities that align with its investment criteria.
Investor Engagement and Commitment
Sense of Urgency
Limiting contributions to a 30-day window creates a sense of urgency among potential investors, encouraging them to act promptly if they wish to participate in the fund's opportunities.
Alignment of Investor Intent
This period also serves as a filter to attract investors who are aligned with the fund's vision and ready to commit their capital to a long term investment strategy, fostering a community of like minded participants.
Operational Efficiency
Simplified Management
Managing inflows within a specific timeframe simplifies operational aspects of the fund, including administrative tasks, compliance checks, and initial fund allocation efforts.
Market Positioning
The deposit period allows the fund to position itself effectively in the market, with a clear indication of its capital base and readiness to invest, which can be a strong signal to potential investment targets and partners.
Transparency and Planning
Clear Communication
Announcing a 30-day deposit window provides transparency to potential investors about the fund's timelines and processes, aiding in their financial and investment planning.
Foundation for Future Cycles
Establishing such a deposit window can also set the precedent for future investment cycles, making it easier for investors to anticipate and prepare for upcoming opportunities to contribute to the fund.
In essence, the 30-day deposit period is not just a procedural step it's a foundational aspect of the fund's strategy, ensuring that it starts on solid ground with a well defined capital base and a community of committed investors. This approach enhances the fund's ability to pursue its investment objectives effectively and efficiently, setting the stage for potential success in the dynamic and evolving landscape of digital assets and disruptive technologies.
Lock-Up Period
The 6-month lock-up period serves as a foundational strategy for the fund's operation, ensuring that there is a solid timeframe for the fund to execute its investment strategies without the pressure of immediate withdrawals. This period is critical for maintaining the stability of the fund and allowing for the thoughtful allocation of resources into promising ventures.
Purpose of the Lock Up Period
Investment Strategy Implementation: The lock-up period grants the fund the necessary time to carefully select and invest in high potential projects and technologies. This deliberate approach is designed to enhance the fund's performance and maximize returns for investors.
Fund Stability: By preventing withdrawals for 6 months, the fund can operate with a stable pool of resources, which is vital for executing long term investment strategies without the risk of sudden capital depletion.
Dividends During the Lock-Up
Profit Distribution: The lock-up period does not preclude the distribution of dividends. Should the fund realize profits during this period, investors have the opportunity, through a democratic voting process, to decide on the distribution of dividends. This mechanism ensures that investors can still receive returns on their investment while the principal is locked in for strategic growth.
Engagement and Incentives: This feature serves as an incentive for investors, providing a potential stream of income even during the lock-up phase. It encourages active participation in the fund's governance processes, fostering a sense of community and shared success among investors.
Importance for Investors
Understanding and Commitment: Investors should be aware of and comfortable with the lock-up period before contributing to the fund. It reflects a commitment to the fund's strategic vision and a long term investment mindset.
Strategic Advantage: The lock-up period is a strategic tool that ensures the fund has the necessary time and resources to pursue investments that align with its objectives of identifying and capitalizing on disruptive technologies and projects.
In summary, the 6-month lock-up period is a critical component of the fund's strategy, aimed at ensuring stability and allowing for the meticulous execution of its investment mandate. The possibility of dividend distribution during this period aligns investor interests by providing returns while still securing the capital needed to make impactful investments.
Withdrawal Options and Fund Termination
Withdrawal Window
After the initial 6-month lock-up period, investors can withdraw their tokens, should they choose to. This flexibility is crucial for investors seeking liquidity or wishing to reallocate their investments based on their financial strategies or market outlooks.
End of Life Cycle
At the conclusion of the 5-year period, the fund will be terminated, and a new fund may be launched, potentially with different metrics or focus areas, to continue capturing investment opportunities in the evolving market landscape.
Innovative Exit Strategies
Secondary Market for LP Tokens
To enhance investor profitability and provide additional liquidity options, we are exploring the introduction of an in-house marketplace for selling LP tokens. This innovative approach would allow investors to trade their stakes in the fund, offering a dynamic way to manage their investments.
Continuous Dividend Payments
Despite the fixed life cycle, the fund plans to distribute dividends to investors continuously throughout the 5-year period. This ongoing payout structure aims to provide regular income to investors, reflecting the fund's performance and the returns generated from its investments.
Fees
The fund charges a 2% management fee upon deposit and a 30% performance fee on profits, supporting a mutually beneficial 70/30 profit split between the fund and its investors.
Controlled by Voting
All fund movements and strategic decisions are governed by investor voting, ensuring a democratic and transparent approach to fund management.
Optional Voting and Proxy System
In our fund's governance, investor voting plays a crucial role in guiding the direction of fund movements and strategic decisions, establishing a foundation of democracy and transparency. This voting mechanism ensures that every investor has a voice in the fund's management, aligning with our ethos of collective participation and oversight. However, we understand that not all investors will have the time, interest, or expertise to actively participate in every vote.
Voluntary Participation
Investors are not obligated to vote. This flexibility recognizes the diverse backgrounds and commitments of our investors, providing an inclusive approach to fund governance.
Proxy Voting: In instances where an investor chooses not to vote or is unable to, their vote automatically becomes a proxy for the fund management. This system ensures that all shares are represented in decision-making, allowing the fund to operate efficiently and responsively.
Management as Proxy
The fund management team will cast votes on behalf of investors who do not participate in the voting process, guided by the fund's strategic interests and the pursuit of maximizing investor returns.
Accessibility and Ease
No Blockchain or DeFi Expertise Required
Our fund is designed to be accessible to all investors, regardless of their familiarity with blockchain technology or the DeFi sector. This inclusivity is fundamental to our mission of opening up investment opportunities in disruptive technologies.
Automated Dividend Distribution
To further simplify the investment experience, dividends are sent directly to the investors' deposited addresses, eliminating the need for any action to claim earnings. This automatic distribution ensures that all investors benefit from the fund's performance seamlessly.
Communication and Transparency
Even though voting is optional, we maintain a high level of communication with all investors. Emails and updates are sent out regularly to keep everyone informed about upcoming votes, fund performance, dividend distributions, and key strategic decisions.
By offering an optional voting mechanism with a proxy system, we cater to the varied needs and preferences of our investors, ensuring that everyone can participate in the way that best suits them. This approach, combined with our efforts to streamline the investment process and keep all investors informed, underscores our commitment to creating a transparent, democratic, and accessible investment fund.
Enhanced Security Measures
By burning the fund's access keys, the fund ensures that no unilateral decisions can be made, and all fund movements require community consensus, enhancing investor security.
Burning Keys
In our commitment to enhanced security and transparent governance, we have implemented a crucial safety measure by "burning" the fund's access keys. This might sound technical, but let's break it down into simpler terms that everyone can understand.
Imagine the fund is a secure vault, and the access keys are, well, keys to this vault. In traditional setups, the management team holds onto these keys, meaning they can open the vault and move assets around at their discretion. However, in our case, we've decided to metaphorically "burn" these keys. This means we've permanently destroyed the ability for any single party, including the fund management, to access or move the fund's assets on their own.
Here's what this means for our investors, especially those not familiar with blockchain or DeFi jargon.
Enhanced Security
Just like a bank vault that requires multiple keys to open, our fund's assets can only be moved with the approval of the community "the investors in the fund". This drastically reduces the risk of unauthorized access or unilateral decisions that could harm the interests of the investors.
Democratic Process
Every significant decision, including the movement of funds, requires a consensus among investors. Think of it as a collective decision making process where your voice counts, ensuring that actions taken are in the best interest of the group rather than dictated by a single entity.
Trust and Transparency
For investors, knowing that no single party can control the fund without community approval builds trust. It means that your investment is safeguarded by collective oversight, leading to a more secure and transparent operation.
Simplicity and Peace of Mind
For those not familiar with the intricacies of blockchain technology, this approach simplifies things. You don't need to understand how keys or consensus mechanisms work technically just know that your investment is protected by a system that requires mutual agreement for any major action.
By burning the access keys, we've essentially created a fund that operates on the principles of shared governance, security, and trust. This innovative approach ensures that our fund remains resilient, democratic, and aligned with the best interests of our investor community.
Performance Drivers
Leverage Management: Agents dynamically calibrate exposure based on market conditions.
Directional Bias: Strategic use of long or short exposure depending on predictive signals.
Funding Rate Arbitrage: Capture premium or discount from funding differentials across platforms.
The Long/Short Fund is not just about trading—it's about building a system that thrives in uncertainty. Whether markets soar or collapse, the fund is designed to position capital accordingly with precision and speed.
Welcome to the future of algorithmic DeFi investing.
Potential for Significant Returns
The Long/Short Fund is engineered to capture outsized returns by exploiting directional volatility in crypto markets. Rather than relying on passive exposure, the fund uses algorithmic trading agents to take leveraged long or short positions in real-time. These positions are informed by high-frequency data, funding rate inefficiencies, and market momentum. When volatility spikes or sentiment shifts rapidly, our agents act instantly—seizing opportunities that manual strategies often miss. By dynamically allocating capital and leveraging predictive models, the fund transforms market fluctuations into consistent alpha generation.
The potential for significant returns stems from several key factors:
The Long/Short Fund's return profile is driven by sophisticated directional trading strategies that capitalize on volatility, inefficiencies, and momentum shifts across crypto markets. Several key factors contribute to its performance:
Directional Trading with Leverage: By accurately identifying trend reversals and momentum surges, our AI agents initiate long or short positions with calibrated leverage—amplifying gains when predictions are correct.
Funding Rate Arbitrage: Across decentralized perpetual platforms, funding rates often diverge from market sentiment. Our system exploits these discrepancies to generate risk-adjusted income by positioning on the more favorable side of the trade.
Volatility Exploitation: Instead of avoiding volatility, the fund embraces it. Spikes in price action often create sharp entry and exit opportunities, especially for agents trained to act faster than human traders.
Compounding Performance: Profitable trades are recycled into new opportunities, allowing returns to compound over time. Agents use reinforcement learning to continuously refine strategies based on evolving market data.
While the use of leverage increases profit potential, it also introduces risk. To mitigate this, our agents operate with strict risk parameters, capital preservation logic, and cross-platform diversification.
Overall, the Long/Short Fund is designed for investors seeking higher performance in both bull and bear markets—without being exposed to the passive drawdowns of traditional long-only strategies.
Ride the Market—Both Ways
The Long/Short Fund is your entry point into dynamic, AI-powered trading in crypto markets. By participating, you're not just holding through cycles—you’re actively capitalizing on them. Our trading agents identify long and short opportunities in real-time, turning market volatility into potential gains. Join the evolution of DeFi investing and position yourself ahead of the curve.
