Sigil launches a market neutral Sigil Stable fund
Sigil PPC Limited, a Gibraltar established Protected Cell Company, (“Sigil fund”) has launched a new fund - Sigil Stable. This comes in addition to the existing Sigil fund’s flagship strategy - Sigil Core.
- Sigil Core gives investors exposure to a well selected portfolio of crypto assets as well as extra yields harnessed from DeFi. It aims at generating returns in the range of -70% to +2,000% depending on the market performance. This dynamic high-risk and high-reward strategy delivered +300% in ROI in 2020/21 so far. Sigil Core has been designed for investors who can live with the short-term volatility in return for more prominent gains in the long-term.
- Sigil Stable on the other hand, focuses on yield farming in DeFi while eliminating the volatility. Sigil Stable seeks to eliminate the volatility of crypto markets by holding only tokenized dollars ("Stablecoins") and/or market neutral positions. The target return is predicted to be around 25% per annum. This strategy allows investors to pick up the yields from the blockchain space without the need to worry about the price of Bitcoin.
- *Price of a tokenised USD in DeFi (Decentralised Finance) is not always 100% accurate 1:1
- **Stablecoins are tokenised USD and EUR. Most stablecoins held are in USD, some in EUR
- **Sigil Stable can also harness arbitrage and other market neutral strategies
Sigil Stable strategy
Sigil Stable strategy is centred around holding and ‘farming’ stablecoins in DeFi and generating returns via market neutral trading strategies. The fund will harness yields by active participation in the decentralised protocols such as staking, liquidity providing, running nodes and broadly speaking “DeFi yield farming” using stablecoins.
The objective of this market neutral strategy is to achieve a positive absolute return by investing in a range of blockchain-related stablecoins and deploying them into well selected decentralised projects. Choosing the right decentralised project (or “farm”) requires a lot of market analysis, reading security audits, constantly comparing yields between farms and moving stablecoins from project to project to optimise long term ROI.
Sigil Stable may also harness market neutral trading opportunities such as arbitrage or invest into quant funds that seek being market neutral and have a track record of a positive ROI.
What are stablecoins?
Stablecoins are DeFi-related crypto assets that aim to maintain a stable value by referring to the value of one or several fiat currencies (or commodities) that are legal tender. Besides stablecoins that are pegged to a fiat currency (like USDC or USDT), there are also collateralised Stablecoins (such as DAI that is minted against a deposited ETH) or algorithmically derived stablecoins (such as FRAX or UST).
Is Sigil Stable for you?
While it’s a young new fund, we have already seen several investors depositing into it, and we have been in conversation with many other prospective investors. So far our understanding is that Sigil Stable is a perfect product for:
- Crypto whales who like to park their stablecoin capital productively. Sigil Stable will accomplish approximately a double return to what you can earn passively. Sigil Stable could also improve your returns if you already actively farm in DeFi but do not have a full time operations team like Sigil.
- Investors understanding DeFi and Stablecoins who are comfortable with the tail risks in the emerging crypto ecosystems are also a welcome customer. These are experienced crypto investors who are not necessarily whales but who understand the pros and cons of crypto investments. On the risk side, these investors know that blockchain products may fail or get exploited and in extreme cases Stablecoins can sometimes go down in value despite being designed to hold it. This shock is usually temporary but could also be terminal in some very extreme situations.
- Any other investor who prefers a small yield instead of a negative interest charge in a bank. This can include companies wishing to allocate treasury more productively and any other institutional investors. However, these investors should invest only a smart part of their capital because they likely are not comfortable with DeFi or Stablecoins to allocate bigger capital. At Sigil we have a philosophy of not downplaying the underlying tail risks and whilst we are ourselves fully comfortable with these crypto opportunities and trust well-managed crypto portfolio more than banks (we have been in the crypto space for long), we do not see the need to convince investors who have a different opinion. This is the most conservative strategy in crypto that you can find, and it yields nicely but it’s still not completely risk-free. It's crypto and you need to decide for yourself whether you’d like to take the risk or not.
How to join Sigil Stable
Existing Sigil Core investors will have the opportunity to split their current portfolio between the 2 funds, or make a new deposit directly into Sigil Stable.
Sigil Stable is also open to professional and institutional investors who wish to hedge against high-risk strategies and are looking for more moderate passive income. In order to apply, please get in touch with us at firstname.lastname@example.org