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The largest digital asset manager, Grayscale Investments, has made its foray into the decentralized finance (DeFi) space. Grayscale unveiled this news through a press release earlier today, noting that it had joined hands with CoinDesk Indexes, a subsidiary of crypto media platform CoinDesk, to launch a new DeFi fund and index. Reportedly, the new products are dubbed Grayscale DeFi Fund and CoinDesk DeFi Index.
According to the news release, Grayscale decided to dabble in DeFi to offer investors an opportunity to access new, exciting facets of the digital currency ecosystem. Per the company’s CEO, Michael Sonnenshein, the DeFi sector offers technologies that can reshape the future of the financial services industry.
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The Grayscale DeFi Fund will offer investors access to a selection of industry-leading DeFi protocols. Purportedly, it will offer a market capitalization-weighted portfolio that tracks the CoinDesk DeFi Index. Per Grayscale, this is its 15th investment product, and its second diversified fund offering. The fund is currently open for both eligible individuals and institutional accredited investors to make daily subscriptions.
Grayscale further disclosed that it intends to quote shares of this fund on a secondary market, just like its other products. Nonetheless, the company cautioned that regulators, such as the SEC and FINRA might have concerns over the fund. To this end, Grayscale does not guarantee that the product will make it to secondary markets. Hence, shareholders should be prepared to bear the risk of investment indefinitely.
Offering institutional investors broad access to DeFi
The CoinDesk DeFi Index, on the other hand, seeks to offer a broad-based representation of DeFi protocols. Reportedly, this comprises liquid DeFi assets selected on a market capitalization-weighted basis. At the time of writing, the Index comprises UniSwap (46.44%), Aave (11.63%), Compound (10.81%), Maker (6.87%), Curve (6.34%), Synthetix (5.92%) SushiSwap (4.80%), Yearn (2.90%), UMA (2.44%), and Bancor (1.85%).
In a subsequent interview, Sonnenshein touted this index, saying it is an institutional-grade digital currency investment vehicle that would allow investors to pump their money in a broad range of DeFi protocols.
Commenting on this collaboration, CoinDesk’s Managing Director, Jodie Gunzberg, said,
This partnership underscores our leadership in creating institutional-grade digital currency indexes.
He added that the DeFi space has been getting a lot of attention over the past few months. That being the case, it was critical to offer the investment community requisite tools that provide calculated exposure to the rapidly growing industry.