Notification of changes to DAF IM - April 2022

MHC Digital Finance -
April 18, 2022

The Trustee of the Digital Asset Fund (the Fund), MHC Digital Fund Services Pty Limited (the Trustee), has made changes to the Fund's Information Memorandum (IM) during April of 2022.

The changes are summarized as follows:

  • The Fund is now available to eligible New Zealand investors.
  • The Fund has adopted more flexible portfolio composition parameters to provide the Investment Manager (the Manager) with greater flexibility in responding to emerging trends in the digital asset space.
  • Changes have been made to the Fund’s DeFi strategy with associated changes to the Fund’s custody solutions, as the Fund looks to expand the application of its DeFi strategies across the portfolio.

Increase DeFi across the portfolio and changes to custody

While the Manager initially placed great emphasis upon the Fund’s digital assets being held in cold storage by a third-party custodian (being Copper), the Manager found that this arrangement considerably limited maneuverability of those assets, and in turn compromised the Manager’s ability to respond effectively to the often-volatile crypto market.

At the same time, the Manager has been researching and testing DeFi protocols wherein the Fund could lend some or all of its assets in exchange for additional returns. This DeFi strategy is known generally as ‘staking’ and comprises lending either liquid coins or stablecoins to validator staking pools, liquidity pools and lending pools in exchange for yields in the form of crypto assets.

As such, the decision has been made by the Trustee to allow the Manager to move away from third-party cold-storage custodianship to facilitate the Manager's more active trading strategy and to allow the Manager to employ DeFi strategies across as much of the portfolio as possible.

To receive the latest version of the IM, please submit a request through our Digital Asset Fund page.

Should you have any questions regarding the Fund or changes to the IM, please do not hesitate to contact us at info@mhcdigitalfinance.com.

Kind regards,

MHC Digital Finance

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