Crypto market maker and Web3 investment firm DWF Labs has announced an investment of up to $75 million in decentralized finance (DeFi) projects aimed at supporting institutional adoption.
The firm shared its announcement via X on Wednesday, stating that the fund will support projects with "innovative value" propositions capable of scaling to accommodate large-scale adoption.
"The initiative will target blockchain projects building dark-pool perpetual DEXs, decentralized money markets, and fixed-income or yield-bearing asset products, [...] areas the firm believes are poised for major growth as crypto liquidity continues its structural migration on-chain," DWF Labs stated.
As part of the announcement, DWF Labs managing partner Andrei Grachev emphasized the importance of building DeFi infrastructure "with real utility" that can support institutional demand.
"DeFi is entering its institutional phase," he said. "We’re seeing real demand for infrastructure that can handle size, protect order flow, and generate sustainable yield."
The fund will focus on projects built across Ethereum, BNB Smart Chain, Solana, and Coinbase’s Ethereum layer-2 Base.
In addition to capital injections, DWF Labs will also provide support through "TVL and crypto liquidity provisioning, hands-on go-to-market strategy and execution support," as well as access to partnered exchanges, market makers, infrastructure providers, and institutions in the crypto space.
DeFi's Future Potential
As of the time of writing, over $120 billion in total value is locked across all DeFi projects, according to DefiLlama data.
The total value locked reached its peak during "DeFi Summer" in 2021, at around $175 billion. It recently approached this high again last month, before the Oct. 10 market crash, having circled $166 billion.
While DeFi initially emerged as a niche area designed as a decentralized alternative to traditional finance, some experts believe that centralized institutions will play a crucial role in its mainstream adoption.
Speaking in a video published to YouTube on Tuesday, Chainlink co-founder Sergey Nazarov stated, "I think we’re about 30% of the way there."
Nazarov predicted that DeFi would achieve 50% mass adoption once the regulatory climate becomes clearer. He anticipates 70% adoption when the infrastructure and technology are sufficiently simple and efficient for institutions to allocate their capital and client funds into DeFi.