Executive Summary
What’s Working with Allocators is a Crypto Insights Group series aimed at better understanding how institutional allocators are approaching digital asset strategies today and how managers are adjusting in response. The series is designed to capture candid perspectives from managers on what they are hearing in allocator discussions, where expectations are rising, and how investment frameworks, communication, and fund structures are evolving. The focus is on practical observations rather than promotion, with the goal of offering insight that is useful to both allocators and managers navigating a rapidly maturing market.
Each conversation is guided by a common set of questions that examine allocator priorities, investment and risk considerations, lessons learned, and how managers are positioning for what comes next. By maintaining a consistent structure across interviews, the series seeks to highlight recurring themes in how allocators build conviction, evaluate portfolio fit, and assess strategies over time.
In this edition, we spoke with Re7 Capital to explore how allocators are evaluating non-directional DeFi yield strategies and crypto-denominated share class structures as part of broader portfolio and treasury objectives. Re7’s perspective offers a clear view into how DeFi and active management are converging in allocator conversations and how leading managers are adapting to more institutional investment frameworks.
Can you tell us about Re7 Capital and the types of allocators you work with today?
Re7 Capital is an award-winning, research-driven digital asset investment firm specialising in DeFi, alpha generation, and risk management. Founded in 2021 with the launch of its flagship fund, the firm has since deployed over $1 billion across decentralised finance markets. Re7’s all-weather investment approach is designed to serve both traditional and crypto-native participants across market cycles.
The flagship fund is a market-neutral DeFi yield fund, employing a fixed-income-style approach to generate risk-adjusted returns. Its core strategy involves deploying stablecoins across decentralised ecosystems, complemented by market-neutral crypto trading bots.
Re7 Capital has a diversified investor base that includes crypto-native firms, high-net-worth individuals, wealth managers and private banks. Alongside this, the firm is seeing growing interest from large institutional investors.
How are allocators evaluating DeFi as an allocatable source of risk and return today?
Allocators can broadly be divided into two groups: traditional finance investors and crypto-native firms, each serving different end clients and therefore operating with distinct due-diligence processes and decision-making frameworks. However, both groups are increasingly converging around a common assessment of DeFi’s value proposition: its ability to offer access to orthogonal sources of risk and return. Driven by transparent on-chain activity and liquidity provision, rather than traditional macro or corporate fundamentals, DeFi is increasingly recognised and appreciated as a key diversifier within a broader portfolio context.
As DeFi is increasingly assessed through this portfolio lens, risk management has moved to the center of allocation decisions. For allocators, access to orthogonal return streams is only valuable if the associated risks can be measured, controlled, and consistently managed across market regimes. Allocators focus on the robustness of portfolio construction, the discipline with which hedging strategies are implemented, and the ability to maintain liquidity during periods of market stress. Crucially, they seek evidence that these controls are not merely theoretical, but have been systematically applied and proven over time, reinforcing confidence in DeFi as an allocatable component of institutional portfolios.
Where previous market cycles were largely characterised by crypto-native investors pursuing outsized returns and traditional finance remaining on the sidelines, the current environment reflects a meaningful convergence between the two. As these worlds begin to collide, investor expectations shift toward institutional-grade frameworks. This transition marks an important step in the maturation of the DeFi sector, as it evolves from a speculative arena into a more durable and professionally structured investment landscape.
What has resonated most with allocators when it comes to transparency, communication, and engagement?
A key factor in attracting and retaining allocator interest has been a disciplined approach to communication and transparency. We focus on presenting the strategy and its risk profile clearly, using consistent materials that contextualise performance alongside portfolio diversification, specifically incorporating DeFi risk allocation and exposure across chains.
This is supported by a regular communication cadence. We publish a weekly Substack covering developments in DeFi and broader market themes, as well as articles focused on our proprietary risk management framework. In addition, we distribute monthly market updates alongside portfolio manager commentaries that provide context around performance, positioning, and changes in risk exposure.
Allocator engagement is reinforced through quarterly calls, where we review fund performance, allocations, and portfolio dynamics in detail, and allow time for questions and follow-up discussion. This format has proven effective in addressing concerns proactively and maintaining alignment over time.
Finally, the fund’s tokenized structure has been a practical tool for transparency. By enabling access to onchain performance data, including live APY indicators, investors can monitor it in real time rather than relying solely on periodic reporting.
How have allocator investment constraints and risk preferences influenced your fund structure and product design?
Tokenization and self-custody
One important adjustment has been recognising the increasing importance crypto-native allocators place on asset control and custody architecture. As a result, the tokenization of the fund has evolved beyond transparency alone to support self-custody, allowing investors to hold their fund exposure directly onchain. This structure aligns more closely with crypto-native expectations around asset ownership and control.
Product development and share-class denomination for treasury management
We developed a BTC-denominated yield product to meet the needs of clients seeking to generate yield without converting their underlying holdings. Over time, this approach also gained traction among ETH holders pursuing similar treasury-focused objectives, which led us to introduce a dedicated share-class denomination designed to better integrate with client treasury operations.
How do you expect allocator investment frameworks for onchain yield strategies to evolve from here?
Looking ahead, we expect allocators to continue deepening their engagement with onchain strategies as the opportunity set for sustainable, non-directional yield expands.
At the same time, the growing adoption of tokenised fund structures reflects a broader shift in allocator preferences toward greater transparency, operational flexibility, and control. For crypto-native allocators in particular, on-chain representations of fund exposure aligns with asset ownership, custody architecture, and settlement, supporting models that allow investors to manage exposure in a way that integrates seamlessly with their broader on-chain portfolios.
In parallel, we see rising expectations around communication and engagement. More frequent, transparent dialogue, combined with clear articulation of strategy behaviour and risk dynamics, is becoming central to allocator relationships, reflecting the continued professionalisation of the DeFi investment landscape.
How does working with CIG support allocator investment analysis and due diligence around your strategy?
Working with Crypto Insights Group has helped standardize how allocators assess our strategy within their broader investment and due-diligence frameworks. Through StrategyIQ and FirmIQ, allocators can evaluate our investment approach, portfolio construction, risk management, and operational controls in a consistent format, supporting more efficient underwriting and peer comparison.
Crypto Insights Group also helps frame ongoing performance and risk in a way that aligns with institutional monitoring processes. StrategyIQ contextualizes returns, positioning, and on-chain risk across market environments, while FirmIQ provides transparency into governance and operational design, allowing allocators to assess the strategy beyond headline performance.
The platform plays an important role in helping allocators identify and evaluate leading managers offering Bitcoin and Ethereum denominated share class strategies. By organizing these strategies within a broader peer set, allocators can compare approaches to non-USD base currencies and understand how these structures fit within treasury-driven and balance-sheet-focused portfolios.
Overall, Crypto Insights Group’s benchmarking, StrategyIQ, and FirmIQ tools support deeper allocator engagement and more productive investment committee discussions, reinforcing transparency and consistency throughout both the initial allocation and ongoing monitoring process.
