DWF Labs launches ‘proprietary’ $75 million DeFi investment fund

Crypto market maker DWF Labs is launching a new $75 million DeFi-focused investment fund. The initiative will target projects building on Ethereum, BNB Chain, Solana, and Base, DWF Labs told The Block.

The move represents an expansion of DWF's existing — and sometimes controversial — "incubation and venture-building efforts," according to DWF co-founder and managing partner Andrei Grachev. In particular, DWF is looking to invest in the next wave of founders "solving real structural problems in liquidity, settlement, credit, and on-chain risk management, rather than incremental variations of existing protocols."

This includes tools like "dark pool" perp DEXs and onchain money market, fixed-income, or yield-bearing products, which are "poised for major growth as liquidity continues its structural migration on-chain."

The new fund is proprietary and is not immediately taking on new investors, according to Grachev.

"DeFi is entering its institutional phase," Grachev said. "We're seeing real demand for infrastructure that can handle size, protect order flow, and generate sustainable yield. This fund is designed to support founders who are building the systems that will define the next decade of open financial markets."

Active, though opaque

Grachev, formerly CEO of Huobi Russia, co-founded DWF Labs officially in 2022 as an extension of the Swiss high-frequency trading firm Digital Wave Finance. The company quickly rose to prominence as it began to deploy hundreds of millions across the crypto ecosystem, particularly in Asia and the Middle East, and support major OTC deals.

In 2023, Binance Research said DWF Labs was the most active crypto-focused venture firm between Q3 2022 and Q3 2023, having led 39 deals totaling $324 million. At the time, the firm counted over 700 blockchain projects in its portfolio, a number that has since grown to over 1,000, according to its website.

The firm’s opaque structure — including potential conflicts between its market-making and venture capital wings — has garnered scrutiny in the past. The Block previously reported the firm is not "a licensed financial institution in most jurisdictions and typically conducts its operations through entities based in the British Virgin Islands and Singapore." 

While a number of crypto market makers also maintain venture portfolios, the units are usually separated by a firewall to prevent conflicts of interest. DWF's many OTC deals have also drawn criticism, which have been seen as a way for token projects to sell their treasury holdings under the guise of a partnership or investment.

Asked about the relative size of the investment team compared to DWF Labs as a whole, Grachev said the firm operates as "a lean, global team with experts across trading, engineering, research, and investments." And asked about the success of previous investment funds, Grachev declined to specify performance numbers for individual deals due to confidentiality clauses.

Why now?

DWF's new fund comes amid a long period of waning crypto-related investments, at least compared to the height of VC activity during the pandemic-era bull market. According to The Block Research's data, crypto startup raises declined substantially in the first half of 2025, totaling just 856 deals as of August, compared to 1,933 in the same period last year.

Exclusive chart via The Block Pro showing quarterly crypto VC activity.

"The current market is the ideal time to support exceptional founders and accelerate the next wave of builders. Conditions are challenging, but this is exactly when the strongest builders emerge, and we want to be backing them now," Grachev said. Earlier this year, the firm launched a "Liquid Fund" to support mid-size and large-cap crypto firms. It has also previously introduced specialized crypto investment programs for verticals from decentralized AI to memecoins.

The new fund is flexible regarding project maturity, though the firm is targeting founders with at least a minimal viable product. And while Grachev thinks Ethereum, Solana, and BNB Chain are the most relevant, it could invest in other crypto ecosystems. Grachev noted the firm is looking to support tools that solve problems institutional traders face when trying to enter DeFi, like the lack of liquidity and privacy.

In particular, dark pools — privacy-preserving trading venues designed to anonymously match buy/sell orders without displaying quotes or order sizes, typically used by institutional or large traders — could be used to maintain "orderly markets," Grachev said. He previously supported the Black Ocean dark pool, which was pitched as a platform for trading in size without moving token prices on the open market.

"Most mature markets use some form of block liquidity to prevent large trades from causing undue market pressure or becoming targets for speculation. Crypto is gradually considering related tools as it scales," he added.

DWF's website notes its "services do not end with strictly market making and/or investment," and can extend from assisting with exchange listings and marketing to legal consultancy and bootstrapping liquidity. The firm reportedly provides spot and derivatives market-making services on 60 centralized and decentralized exchanges for tokens in and outside of its portfolio.

Grachev noted this multi-layer support is designed to give founders "an unfair advantage in a market where distribution and liquidity matter as much as product."

"DWF Labs views the coming cycle of DeFi growth as one defined by real utility rather than speculative hyperactivity," the company said. "As institutional liquidity steps into on-chain derivatives, credit markets begin to standardize, and yield products evolve toward more transparent, fixed-income-like structures, the firm believes that foundational infrastructure is still largely underbuilt."

In April, DWF said it was forging a strategic relationship with World Liberty Financial, the Trump family crypto project, including investing $25 million in the WLFI governance token and launching liquidity support for World Liberty's USD1 stablecoin. That same month, the firm opened an office in the SoHo neighborhood of New York City.