DeFi Technologies boosts AI and trading capabilities with a 52.5% stake in Neuronomics, enhancing its quantitative strategies and market reach.
DeFi Technologies Inc., a financial technology company that pioneers the convergence of traditional capital markets with the world of decentralized finance (“DeFi”), is pleased to announce that it has increased its stake in Neuronomics AG (“Neuronomics”), a Swiss asset management firm specializing in artificial intelligence and model-driven quantitative trading strategies, to 52.5% (the “Acquisition”).
DeFi Technologies’ Previous Investment and Strategic Expansion
This Acquisition follows DeFi Technologies’ earlier subscription to a capital increase in Neuronomics, where the Company acquired a 10% stake. The Acquisition of the majority stake in Neuronomics further aligns with DeFi Technologies’ strategy to expand its presence in artificial intelligence, asset management and trading sectors while diversifying its revenue streams. This strategic acquisition complements DeFi Technologies’ existing initiatives, including the DeFi Alpha arbitrage trading desk, which will benefit from Neuronomics’ technological expertise and market insights.
Strategic Acquisition to Expand Capabilities
Neuronomics, founded in Switzerland, has established itself as a leader in asset management by developing advanced quantitative trading strategies based on artificial intelligence (“AI”) and computational neuroscience. The firm holds an asset management license from the Swiss Financial Market Supervisory Authority (“FINMA”), enabling it to manage and administer financial assets on behalf of clients. Neuronomics’ research-driven approach focuses on two key areas: AI and Computational Neuroscience in Finance.
Artificial Intelligence in Finance
Neuronomics has pioneered the application of advanced AI models in financial settings, delivering AI strategies that outperform market index across all key metrics. The firm’s proprietary AI models combine multiple algorithms to enhance predictive accuracy and reduce model overfitting. Their approach translates AI model outputs into portfolio allocations, optimizing asset distribution to maximize returns while managing risk. Additionally, Neuronomics is at the forefront of customizing Large Language Models (“LLMs”) for predicting asset price developments based on real-time market news. This capability positions Neuronomics to identify emerging investment narratives well ahead of competitors, offering a distinct edge in the market).
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Computational Neuroscience in Finance
Neuronomics also explores how human cognitive biases and emotional responses shape financial behavior, uncovering market inefficiencies that traditional strategies often overlook. Through computational neuroscience, Neuronomics models the neuronal processes of traders, identifying predictable market behaviors that result from overreactions or emotional trading. This approach has been particularly successful in the cryptocurrency market, which is highly influenced by emotional decision-making. Since launching its neurofinance-based crypto strategy in July 2020, Neuronomics has consistently delivered high risk-adjusted returns with minimal correlation to traditional markets.
Technological Innovation and Performance Excellence
Neuronomics leverages cutting-edge AI technology to offer high-risk-adjusted returns in the cryptocurrency market. Their latest developed AI-powered quantitative strategy, set to launch with DeFi Technologies, has demonstrated exceptional performance. Forward-testing analysis shows annual returns of 80% and significantly reduced drawdowns and volatility compared to passive market exposure. The AI-driven model removes human bias, enhances consistency, and dynamically adapts to evolving market conditions, ensuring sustained performance even in volatile markets.
These strategies are built on a diversified, long-only crypto portfolio, rebalanced based on advanced AI models that identify market inefficiencies such as momentum and reversal opportunities. The AI-driven approach has consistently outperformed benchmarks like the CCi30 index, achieving a Sharpe Ratio greater than 1, underscoring its superior risk-adjusted returns. Their Neurofin strategy underscores this resilience by generating positive net returns amid a market downturn exceeding 20% over the past month. Neuronomics’ expertise in AI-driven strategies will significantly enhance DeFi Technologies’ capabilities, especially as a complement to DeFi Alpha, its specialized arbitrage trading desk, which focuses on identifying and capitalizing on low-risk opportunities within the cryptocurrency market.
Background on Management
- Dr. Lorric Ziegler, Partner, brings a strong background in AI and computational neuroscience, with a PhD from EPFL and experience in machine learning and AI applications at prominent Swiss investment firms. Since joining Neuronomics in 2021, Dr. Ziegler has optimized IT, asset management, and risk management processes.
- Dr. Michael Kometer, Co-Founder and Board Member, holds a PhD from the University of Zurich and is an expert in algorithmic trading and emotional decision-making in finance. His research has been widely cited, and his work integrates neuroscience, AI, and finance to develop cutting-edge investment strategies.
- Patrick Schuppli, Partner, manages business operations and relationships at Neuronomics. With a Master’s in Business and Economics from the University of Basel, his expertise in commodity trading and blockchain-based projects has been pivotal in driving business growth.
- Gilles Ramstein, AI Scientist, specializes in machine learning and data science. His innovative work in automating financial processes and developing AI-driven strategies has significantly enhanced the firm’s predictive models.
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Executive Comments
Olivier Roussy Newton, Chief Executive Officer of DeFi Technologies, commented: “This acquisition marks a significant milestone for DeFi Technologies, not only enhancing our position in asset management but also expanding our capabilities in quantitative trading. Neuronomics’ expertise in AI and computational neuroscience will complement our existing trading operations, particularly through DeFi Alpha. This acquisition is a natural extension of our growth strategy, which focuses on diversifying revenue streams, strengthening our trading desk, and enhancing our technological expertise in both traditional and decentralized finance markets.”
Michael Kometer, Co-Founder of Neuronomics, added: “Partnering with DeFi Technologies presents a unique opportunity to scale our operations and further integrate our advanced AI capabilities and model-driven strategies within DeFi Technologies’ broader ecosystem. Together, we will continue to drive innovation and deliver exceptional value to our clients, expanding our reach and operational impact.”
