The Radix Endowment Fund is a 1.5 billion $XRD fund established in 2024 to support long-term ecosystem growth and provide financial stability for entities involved in the development of the Radix platform. The fund is managed by Brevan Howard Digital, the digital asset investment platform of Brevan Howard, a global hedge fund managing approximately $34 billion in assets.
Overview
The fund was created to establish a sustainable source of token generation for ongoing development of the Radix ecosystem while reducing reliance on treasury token sales. A key objective of the endowment is to help drive external investment and co-investment into the Radix ecosystem. The fund operates through a segregated portfolio company structure, which ring-fences the $XRD assets from the manager's own assets to provide security.
The selection process for the fund manager prioritized institutions that could enhance Radix's institutional adoption through product development, partnership building, and technology alignment. The chosen manager, Brevan Howard Digital, manages over $1 billion in digital assets and has significant trading volume on centralized exchanges, positioning it to support exchange adoption of Radix through an institutional lens.
Structure and Management
The Radix Endowment Fund operates through a segregated portfolio company structure, which ensures the $XRD assets are ring-fenced from the manager's own assets while maintaining ownership rights for the contributing entities. This structure provides bankruptcy protection for the fund's assets.
Brevan Howard Digital, through its BH Digital Solutions business, manages the fund's $XRD-denominated contributions. The assets are held in designated accounts at Copper Custody, a regulated crypto custodian that provides institutional custody services. Copper hosts over $50 billion in monthly notional trading volume and supports custody for more than 600 digital assets.
The fund's staking infrastructure is provided by Twinstake, which maintains a minimum staking balance requirement as part of the overall strategy. This arrangement allows the fund manager to unstake portions of the position and redeploy $XRD into other strategies as token prices increase or as additional staking occurs through Twinstake.
Fund oversight includes multiple boards responsible for fiduciary management and control of the relevant Radix assets. The boards prioritize core strategies that are implemented by Brevan Howard Digital as the investment manager.
Investment Strategy
The Radix Endowment Fund operates with $XRD-based mandates, requiring the fund manager to ensure returns in $XRD rather than other assets. This strategy aims to grow the endowment's $XRD holdings over time for the benefit of contributing entities.
A significant portion of the fund's strategy involves staking through Twinstake nodes. The fund maintains a minimum staking balance requirement, with the ability to unstake and redeploy $XRD into other alpha-generating strategies as market conditions permit. The initial staking position increased net network staking by approximately 620 million $XRD.
The investment strategy is developed and overseen by a leading panel of portfolio managers tasked with generating returns exceeding standard staking rewards. The strategy integrates with various institutional partners, including custody infrastructure providers, market makers, ETP issuers, tier 1 exchanges, and stablecoin issuers to facilitate commercial partnerships within the broader crypto ecosystem.
The fund's approach balances generating returns with supporting ecosystem development, as evidenced by its strategic role in driving institutional adoption and market infrastructure improvements. This includes supporting products like Flash Liquidity and partnerships with entities such as Copper Custody and Keyrock.
Impact on Radix Network
The establishment of the Radix Endowment Fund has had several significant effects on the Radix network's operations and tokenomics. The fund's staking activities reduced network staking emissions from approximately 7.7% to 6.7% per annum. To accommodate this change and maintain network decentralization, the Radix Foundation reduced its nodes by two, decreasing its staked tokens by approximately 122 million $XRD and creating space in the top 100 validator set.
The fund's operations resulted in a net increase of approximately 620 million $XRD in network staking. This substantial increase in staked tokens has strengthened the network's security while providing a foundation for institutional participation in network validation.
Network decentralization considerations were specifically addressed in the fund's design, with the reduction in Foundation nodes helping to offset the concentration of staked tokens. The fund's structure also supports the long-term development of the Radix ecosystem by providing a sustainable source of funding that reduces reliance on treasury token sales.
The fund has contributed to broader ecosystem development through its role in facilitating institutional adoption and strategic partnerships. This includes supporting initiatives like Flash Liquidity and fostering relationships with key market infrastructure providers, which collectively aim to increase the network's total value locked (TVL) and overall market participation.