From Locked To Liquid: How Dragonfly Tracks A Token Portfolio Across Its Full Lifecycle

A token position acquired through a SAFT or a token warrant changes form without changing hands. For two or three years it is a contractual right, tracked against a vesting schedule. On the unlock dates it becomes a live balance in a custodian or exchange portal, priced and hedgeable. The investment runs continuously; the systems that record it often do not, so the join between them is made by hand.

‍

Dragonfly, a digital asset venture firm, uses Elwood’s Portfolio Management System (PMS) to track its portfolio across the full investment lifecycle, from locked venture positions through to liquid tokens. Vesting locks, spot, forwards, and equity trades are booked on a single system, so exposure, valuation and profit and loss follow one position from the day it is signed to the day it is sold. Dragonfly's team manages the book; Elwood provides the record, the valuation tooling and the risk analytics the team runs on.

‍

Venture portfolios in digital assets have a liquidity lifecycle that fund infrastructure was never built to follow.

‍

What makes a token venture position different?

‍

A venture position in digital assets does not behave like a venture position in equity. An equity stake is illiquid until an exit event the fund can see coming years out. A token position acquired through a SAFT or a token warrant converts into a live, priced, hedgeable instrument on a vesting schedule that is known at signing. The same asset moves from the illiquid book to the liquid book, in tranches, on dates set in a contract.

‍

That transition is a reporting event, a valuation event and a risk event at the same time.

‍

To date, tracking a token position across that transition has been a fragmented experience:

‍

• The record sits in two places: The locked leg is tracked in a spreadsheet or the fund administrator's file. The liquid leg sits in a custodian or exchange portal. Neither system holds the other, so the joined view exists only as often as somebody builds it.

‍

• The running P&L starts at the unlock: The trading book picks the position up at the unlock price. The subscription price sits in the fund administrator's books, so stating the return from signing to sale means joining the two records by hand each time it is asked for.

‍

• The locked leg still needs a mark: Unvested tokens have a market price but not a market position. Marking them requires a consistent methodology, applied the same way every quarter.

‍

• Risk sits either side of the seam: A fund hedging an approaching unlock holds the hedge in the liquid book and the underlying in the illiquid book, so the net exposure is assembled rather than read.

‍

Effort does not close this gap, because the gap is structural. Fund accounting platforms model illiquid holdings and capital calls well and have no native handling for tokens. Custodian and exchange portals model liquid balances well and know nothing about a vesting schedule. The seam between them is where a treasury team spends its quarter-end.

‍

‍

What does an institutional record for a token portfolio need to do?

‍

• Hold both legs as one instrument set: Locked positions, vesting schedules, private equity and SAFT lines booked on the same data model that carries spot, derivatives and loans, so there is no adjacent system to reconcile against.

‍

• Carry the schedule alongside the balance: The vesting schedule is what makes the position forecastable. Without it there is no view of what becomes liquid and when.

‍

• Value consistently across liquidity states: One pricing source covering liquid and thinly traded tokens, applied the same way each period, with the methodology recorded.

‍

• Produce a record an auditor can follow: Every booking, amendment and cancellation attributed to a user and retained, so a position can be reconstructed rather than reasserted.

‍

• Feed the systems that already exist: Normalised output that feeds the fund administrator's workflow instead of replacing it.

‍

Few firms have this today. Most have a workaround: a quarterly spreadsheet rebuild, a manual mark on the locked book, and a separate view of the liquid book that the treasury team reconciles by hand.

‍

‍

How does Elwood support token portfolio management?

‍

Dragonfly runs the full lifecycle on Elwood’s PMS. Through the platform the team can:

‍

• Book vesting locks with the full vesting schedule displayed against the position

‍

• Hold private equity, SAFT, spot, derivative, loan and staking positions on one system

‍

• Value positions using the platform's pricing methodology, a weighted mid across major venues with a fallback for thinly traded tokens

‍

• Unify all positions, valuations and P&L into one current record, a near real-time Investment Book of Records (IBOR)

‍

• Drill into exposures, Greeks and P&L decomposition across strategies and asset classes

‍

• Model shocks across spot, volatility and time horizons to assess portfolio resilience

‍

• Reconcile trades, positions and balances into a consolidated record with audit-ready records

‍

• Connectivity to custodians, exchanges and liquidity providers through direct integration

‍

‍

How a locked position behaves

‍

A vesting lock is booked as a deal with its full schedule attached. The position shows the original trade amount rather than the unvested portion, with vested and unvested status reflected through price and present value. As tranches vest, the same position carries forward into the liquid book rather than being created again, so the cost basis and the history stay attached to it.

‍

That continuity is what makes the whole-lifecycle view possible. Fund-level exposure includes the locked leg. When the desk hedges an approaching unlock, the hedge and the underlying sit in the same risk view.

‍

Every action on a trade is retained with the acting user attributed, and books can require a second user to approve a booking before it counts towards positions, risk and P&L. The record is retained in full, so a position can be reconstructed as at any prior date.

‍

‍

Where the division of labour sits

‍

Elwood provides the PMS: its record, the valuation tooling, the reconciliation and the risk analytics. Dragonfly's team makes the investment and hedging decisions and manages the book.

‍

‍

Who is this for?

‍

• Venture and growth funds with token portfolios: SAFT and warrant positions, vesting schedules and liquid holdings consolidated in one place.

‍

• Fund-level treasury and finance teams: Consistently applied valuations and a transaction trail to support LP reporting, DDQ responses and year-end audit.

‍

• Multi-vehicle managers: Positions tracked across funds and SPVs from one source.

‍

• Funds running venture and liquid strategies side by side: One exposure view spanning both books.

‍

‍

Why does this matter for digital asset venture investing?

‍

The question in front of a digital asset venture fund is not whether token positions need better records, but whether the operating model treats the venture book and the liquid book as one portfolio or two.

‍

Two was workable while token exposure was a small fraction of the fund. It stops being workable when unlock schedules start driving fund-level risk, when LPs ask in a DDQ how unvested positions are valued, and when the audit firm asks to see the working.

‍

Funds that resolve this early gain more than a smoother reporting process. They gain a view of what becomes liquid and when, which is a planning input as much as a reporting output.

‍

‍

Client perspective

‍

"The Elwood team has been extremely helpful throughout the onboarding process, from assisting with the initial setup and walking us through the platform to developing custom features tailored to our specific needs. The team has been responsive, accommodating, and a pleasure to work with."

‍

Joshua Lim, Liquid Portfolio Analyst at Dragonfly

‍

‍

About Dragonfly

‍

Dragonfly is a digital asset venture firm. Its portfolio spans venture investments and liquid assets. Dragonfly is also an investor in Elwood.

‍

-

‍

Get started

‍

info@elwood.io | elwood.io

‍

For professional clients only. Not for retail clients. 

‍

Elwood Technologies LLP is authorised and regulated by the Financial Conduct Authority, FRN 989174. Elwood is a technology provider; clients trade through their own venue and counterparty relationships. Nothing in this communication constitutes investment, tax or legal advice.

‍