Repost from Greenfield Capital by Henry Krause, June 28, last update: Dec 8: “Backing Brahma – The Institutional-Grade Automated DeFi Management Suite” The full report and all related findings are available on the official website of Greenfield Capital.

We are excited to announce that Greenfield is leading Brahma’s latest $2.5M seed-extension round. Brahma has recently unveiled their institutional-grade DeFi management suite for DAOs, DeFi power users, and on-chain funds called “Console“. 

Brahma initially started as a DeFi structured products protocol, packaged in the form of vaults. While the vaults are still live and generating consistent yield for the depositors, the Brahma team decided to utilize the learnings from running a set of sophisticated DeFi strategies with custom monitoring and execution automated infrastructure to build Console – a product for broader DeFi. 

One of Console’s key features is a fully automated suite of comprehensive yield strategies available for everyone at their fingertips. Some of these are the existing vault strategies but executed directly on the user’s wallet instead of pooling the funds in a smart contract, thus isolating risks. These yield strategies are thoroughly audited and provide a risk-adjusted approach for on-chain yield generation. In contrast to former players like Celsius, BlockFi, or Gemini Earn, the strategies are completely transparent, and deployed funds never leave the user’s own custody. Next to the prebuilt strategy products, Brahma also enables users to create their own strategies utilizing their built-in automation, health check, execution, and monitoring tools.

At the base layer, Brahma is built on top of another one of our portfolio companies – Safe.  Safe is the number one decentralized custody solution in the world holding custody to almost $40B worth of assets. Brahma inherits all the safety features that Safe offers as each new user that onboards to Brahma is automatically deployed into a new individual Safe just for themselves.

Home view of Console beta

As some of the previously mentioned CeFi companies have failed due to the lack of transparency and uncollateralized lending products, their implosion gave us the overall validation that there is a huge market for easy-to-use yield strategy products, as each of these companies managed to gather multiple billions in TVL, which Brahma is set to capture.

Why we’re backing Brahma

Since the start of the first vault in March 2022, Brahma strategy vaults have seen good growth, with a current user base of 2.6K unique users and an average user retention of over 60%. Current vaults’ TVL is $3.6M. The team has been rather conservative with vault’s GTM, prioritizing security and capping individual vault capacity. Despite that, there has been consistent growth in both TVL and unique users for the product.

Brahma unique users/depositors by vault. Source: Dune

While the overall DeFi market saw some liquidity crunches resulting in an outflow of roughly $10B, Brahma managed to further onboard more users and increase their TVL.

Defillama TVL overview. Source: Defillama

At Greenfield, we expect further shifts from custodial products to non-custodial yield generation opportunities, driven by the need for transparency and access to on-chain data. 

Additionally, with further tokenization of real-world assets, which will bring the currently very attractive treasury yield on-chain and general volume picking up again, we expect the outflow trend to reverse and more participants to come back on-chain. Which ultimately become potential clients of Brahma.

We emphasize that sophisticated on-chain actors demand more customized, complex strategies than those typically provided by custodial services. As DeFi protocols become more complex and numerous, the appeal of tools that simplify this complexity will grow. Since in-house automation and monitoring is resource-intensive, self-custodial infrastructure offering built-in DeFi tooling becomes very attractive.

Brahma’s synergies from building on top of Safe present also a unique opportunity for synergistic growth. As a tool that can enhance Safe’s external adoption, Brahma’s strategic relevance offers a competitive edge. Out of Safe’s total assets, roughly $10B are in “major” assets, which are commonly utilized across border DeFi. Even a 1% adoption of Safe’s major assets and 1.4% of its TVL subscribed to advanced Brahma automation is something we believe is not a high bar to achieve in terms of Safe penetration mid-term, especially given the strategic support and Safe Foundation being on board in this round.

Lastly, Brahma’s crypto-native team possesses an impressive track record and a deep understanding of the industry. The team’s extensive connections within the industry, coupled with support from a diverse investor base, provide an advantageous network effect, furthering their reach and potential for growth.