DeFi isn’t just for geeks
How institutional players are bridging the gap between crypto-native tools and TradFi ?
Hi all 👋
It had been months since I last took a deep dive into Decentralised Finance. To be honest, when I first heard about Aave, I thought it was a Norwegian ski resort.
Close enough :)… Aave actually means “ghost” in Finnish.
Jokes aside. Getting into DeFi is like stepping into another dimension, the level of abstraction and disorientation is mindblowing, especially if you come from traditional finance.
You’ve got tokens flying around without any bank in sight, yield generated without anyone actively managing a portfolio, contracts executing themselves and projects run by pseudo-anonymous teams with weird logos and Discords channels buzzing 24/7.
Basically : nothing looks familiar.
Now, I’m far (very far) from being an expert, but I’ve done some digging.
I’ve read, tested, interviewed… and most importantly, I gave the mic’ to those who’ve been in the trenches for a while.
This week, I had the chance to speak with Stanislas de Maistre, GP of Belem Capital, a Luxembourg based fund that’s building a real bridge between TradFi and DeFi.
If you don’t want your kids to roll their eyes at you in a few years when they ask what you were doing during the crypto shift… you might want to hear what Stanislas had to say.
Love from 🇨🇭
DeFi 101 : Who does what?
Let’s keep it simple: if you need just one name to remember, make it Aave. Not because it’s trendy or looks good in a pitch deck, but because it’s one of the core building blocks of DeFi : LENDING. Think borrowing and lending money… without a bank.
Then there’s Uniswap, the GTM-place for token swaps, where prices aren’t decided by an order book but by a math formula.
And from there, you’ll discover Curve, Morpho, Lido and many more.
Here’s the interesting part: DeFi isn’t an UFO, I see it as a mirror of the finance you already know.
DEXs (Decentralised Exchanges), replacing traditional stock markets
Lending/Borrowing protocols, replacing deposit banks
Yield vaults, resembling structured funds
Stablecoins, i.e. currencies but with no central bank
In a nutshell → same logic, new tools.
The underlying assets change (tokens instead of stocks or bonds), the risks evolve (we’ll get there) but the core mechanics : Allocation, Flow, Yield, Risks are still here.
And maybe that’s what’s most disorienting : DeFi isn’t another world. It’s a remix of the same track.
What do funds like Belem Capital actually do?
What made me want to invite Stan was exactly this: to shed light on the fuzzy boundary between TradFi and DeFi.
People love to talk about bridges… but Belem? It’s building a “Golden Gate” between these two worlds.
Belem Capital isn’t a shadowy Hedge Fund registered in a tax haven, it’s a regulated Luxembourg vehicle, with an AIFM, an Admin, with compliance rules, KYC, termsheets and a prospectus.
And yes, you can invest in DeFi without a Metamask wallet, without a private key, without setting an alarm for 2:00 AM to co-sign a multisig transaction.
Strategy
The exact same strategies run under the hood - whether at their crypto-native fund MEV Capital or via Belem.
To make it very simple : lending on Morpho, providing liquidity on Uniswap, capturing fees on stablecoin pools, all of it managed with robust governance, multiparty custody setups and a protocol scoring framework that wouldn’t feel out of place in a private credit fund.
Clients
Belem’s Clients come from TradFi too but just like the rest of us, they’ve started to sense that something is shifting.
Why calling DeFi a “sub-asset class” actually makes sense?
Stanislas explains it clearly : when they deploy a million in USDC, they’re not betting on price swings. They’re providing liquidity into protocols like a bank would do in TradFi.
Let’s take an example : every time a trader swaps one token for another, the protocol takes a small fee. And Belem, as a liquidity provider, takes a share.
And just like in any serious investment strategy, the key is diversification. Belem has around 30 protocols on its whitelist. Each one is scored : AAA, BB… just like credit rating agencies.
What are the risks?
The main risk in DeFi isn’t what you’d expect. It’s not the market crashing, most funds like Belem are market neutral, meaning, they’re not exposed to Bitcoin or Ethereum’s volatility.
What keeps them up at night is Tech’ risk : smart contract hacks.
How does it work ?
You put millions into a protocol. The code seems safe. Then a hacker, a bot or an overlooked bug shows up and the pool is drained.
To mitigate that, Belem built a strong risk scoring framework. It’s old-school risk management applied to a new-world system.
And then, there are the false promises. Remember Terra Luna?
An algorithmic stablecoin (UST), supposedly pegged to the dollar by a magical mint-and-burn mechanism with the Luna token. We even talked about it with Pablo Veyrat in my episode on Angle Protocol, just before the crash :)
What happened?
A USD 60+ billion ecosystem collapsed in days, wiping out investors and shaking DeFi to its core.
That’s exactly why funds like Belem operate with discipline.
And yes, there are operational risks too.
The well-known “fat finger”….the wrong transfer. As a reminder for beginners, on-chain, there’s no support hotline. No “Cancel” button.
So Belem put in place a multiparty custody system. To move a single USD, at least three people - from both MEV and Belem - have to approve.
It’s basically the crypto version of double validation from the trading floor. I know that set-up well. And it works.
Episode highlights
Hard to sum it all up, but here are three things that stuck with me from my conversation with Stan:
DeFi isn’t just for crypto bros. It’s institutionalising, it’s being regulated and it’s entering fund structures.
DeFi strategies can be market-neutral, liquid and uncorrelated. That makes them relevant for allocators.
Luxembourg is becoming a real Lab’ for structuring the next generation of regulated DeFi funds.
Add a partnership with SG Forge, solid performance history and rigorous governance, and you’ve got something worth paying attention to whether you’re an allocator, a family office or just plain curious.
👉 If you want to know more, listen to Stan here.
Conclusion » Get involved
No, you don’t need to open a wallet today. But if you’ve made it this far, then clearly, you can feel something’s changing.
So, my recommendation : Learn + Test + Talk to the people who know what they’re doing.
And above all: don’t stay on the sidelines just because “you don’t get it”.
Because one day, your clients, your kids or your LPs will ask what you did when the financial system evolved.
And that day, “I was waiting to see how it played out” won’t make it.