To Our Validator Digital Asset Fund Limited Partners,

Overview of Results:

What a great time to be in a digital asset hedge fund. July's net returns of 12.45% outperformed the benchmark CoinDesk 5 Index (+12.09%) -- or 3.42% on a relative basis. As you can see above, we estimate that overperformance has continued into August so far.

Top performers:

The top three performers for the month of July were:

  1. Ethereum (ETH) +38%. ETH significantly overperformed in July. That trend continues into August. ETH has been the institutional winner of the passage of the GENIUS Act, which President Trump signed into law on July 18. As of July 31, ETH was the portfolio's second-largest asset, at 22.8%. BTC was the Fund's largest holding as of July 31.  However, it's worth noting that the Fund expects that ETH will be its largest holding in August, given the recent surprisingly strong institutional conviction around ETH, and conflicting reports regarding the Trump Administration's commitment to add to the Bitcoin Strategic Reserve.

  2. Rocketpool (RPL) +37%. Rocketpool, an Ethereum-staking-as-a-service provider, significantly outperformed, returning 37% in July. That trend continues into August so far. RPL is benefiting from two tailwinds: (1) increased demand from staking services as institutional investors buy & stake ETH, and (2) a change in its tokenomics, which will drive additional revenue, in the form of ETH, to RPL stakers (including the Fund). Those changes go live in Q4.

  3. Chainlink (LINK) +23%. Chainlink is an institutional provider of on-chain data oracles. It also continues to see strong growth in August, partially as a result of a change in its tokenomics model. Now, the protocol will automatically begin buying back LINK from the open market, using on and off-chain revenues.

Bottom Performers:

The bottom three performers for the month of July were:

  1. Aave (AAVE) -8%. Aave is the largest decentralized borrowing & lending platform. While July was a down month, AAVE has rebounded significantly in August. The Fund now has a cumulative 15.82% gain on its AAVE position.

  2. Hyperlink (LINK) -5%. Hyperlink is an EVM-compatible layer-1 blockchain built for financial markets. The overwhelming majority of decentralized futures trading occurs on Hyperlink, and 100% of its revenues are returned to tokenholders via buybacks and fees paid. Similar to AAVE, the Fund's holdings in LINK have rebounded in August, up cumulatively 17.47%.

  3. Bitcoin (BTC) +6%. Bitcoin has underperformed relative to the portfolio, though 6% is still a return to be excited about. Given BTC's significantly larger market cap, I expect it to be less volatile than the other assets in the portfolio. Its performance was similar in August as it was in July. BTC was the portfolio's largest holding in July, at 44.5%. As I mentioned above, that percentage has decreased significantly in August, based on ETH's expected overperformance in the short term.

Financial Statements

Your first monthly statement is available via the investor portal, located at http://portal.validatordigital.com/. You should receive an email from Securitize in the next 24 hours with instructions on how to create an account and log in.

LP Telegram Group

I have created a private Telegram group for Fund LPs. In this group, I will share thoughts/articles/resources that are relevant to your investment. You are invited to share and discuss as well.

You can join by clicking this link: https://t.me/+wF_6y6M_BzE4Y2Mx. You will need to download the Telegram app (iOS / Android).

Follow-on Investments

Several LPs have asked about follow-on investments. The Fund accepts new investments up to three business days before the first of each month. If you are interested in investing further, please let me know.

Referrals

Several LPs have asked whether they can refer prospective LPs to invest in the Fund. Of course, if you have any prospective LPs who are interested in learning more, please connect me with them at [email protected] or 615-200-7953.

Update to PPM and LP Agreement

For July investors, you will see in your portal a cover letter describing updates to the PPM & LP Agreement, reflecting two changes: (1) selection of an auditor, and (2) additional risk factors around hedging strategies. Please do not hesitate to let me know if you have any questions.

In case of questions do not hesitate to contact us at:
[email protected]

Best Regards,
Validator Digital Asset Management

CONFIDENTIAL & PROPRIETARY: This report is for informational purposes only and should not be construed as investment advice. It is not a recommendation of, or an offer to sell or solicitation of an offer to buy, any particular security, strategy, or investment product. Our research for this report is based on current public information that we consider reliable, but we do not represent that the research or the report is accurate or complete, and it should not be relied on as such. Our views and opinions expressed in this report are current as of the date of this report and are subject to change. Past performance is not indicative of future results. Any reproduction or other distribution of this report in whole or in part without the prior written consent of Validator Digital Asset Management GP, LLC is prohibited.