At Bitcoin 2024 this past July, Samara Alpha Management and Bitcoin Magazine Pro selected Boreal, a market-neutral DeFi hedge fund, as the winner of this year’s Bitcoin Alpha Competition.
Boreal was awarded $1 million in seed funding and access to facility-level infrastructure in Samara to help manage its fund.
Boreal stood out because of its trading strategy, which uses various DeFi protocols to generate yields over US dollars, bitcoin and ether.
“Even when things are very good, there is always a way to generate profit in DeFi,” said Boreal founder Evan Morris, who has been in the crypto space since 2016 and worked in traditional finance before that.
“I started in this space four years ago managing foreign currencies with two friends and ended up joining a large company as a portfolio manager where I did DeFi strategy for a few years. Recently, I launched Boreal, and now, with Samara’s help, we can take things to the next level,” he added.
Adil Abdulali, Chief Investment Officer at Samara Asset Management and one of the judges in the competition, commented on why Samara was happy to work with Boreal.
“Evan is someone with an excellent track record and the right risk profile for this type of strategy,” he said. “He is commercially mature, and since crypto is such a small market, someone with several years of experience in DeFi is rare.”
Abdulali also shared details of how Samara plans to support Morris.
“We thought that if there is a way to quickly remove him with all the infrastructure like manager, accounting, financial accounting, subscription documents, bank account, BitGo accounts, etc. — everything we have — let’s do it,” he said.
DeFi to Bitcoin
Moving forward, Morris sees bitcoin playing a much bigger role in the DeFi space.
“With bitcoin coming into the DeFi space, we’re able to do some of the same things that we were able to do with stablecoins a few years ago,” he said.
“DeFi 1.0 was mostly based on USDC- and Tether, but the future of DeFi will include different types of bitcoin derivatives and wrapped bitcoin. And we are happy to provide the currency.”
Abdulali also feels that bitcoin will play a big role in DeFi, and his company is well positioned to help Boreal capitalize on this.
“Bitcoin is not just like every other coin – it’s one of the best securities out there,” he said.
“We use bitcoin in our bitcoin-denominated fund, which we launched about a year ago and which uses the same strategies as our market-neutral dollar-denominated fund. However, the wallet works entirely on bitcoin,” he added.
“The idea is to use bitcoin in these new DeFi protocols like Babylon in market making strategies instead of putting a security like USDC or USDT in the exchange.”
The future of DeFi
Morris explained that DeFi has come a long way since four years ago, when it first arrived on the scene as a crypto sector.
“There are just too many tools to get smart contract alerts and smart contract security checks,” he said.
“Cybersecurity and wallet technology are much better, too. This allows for institutional-level DeFi products,” he added.
And Abdulali wants to see Boreal take advantage of this institutional-level DeFi before the institutions arrive.
“All this new institutional money is not going to affect DeFi for a while,” Abdulali explained. “They didn’t get into bitcoin, so it’s going to take a long time before the DeFi space is saturated and there’s a lot of money,” he added.
“There will be good results for some of us who are willing to play in the space now.”