Grayscale Investment, CoinDesk Index Partner to launch DeFi fund

Last updated on November 17th, 2022 at 02:25 pm

The Grayscale DeFi Fund is a newly diversified investment product that is now open to daily subscription by accredited individuals and institutional investors. 

The DeFi Fund is Grayscale’s fifteenth investment product, and its second diversified fund offering.

The DeFi Fund will help selected investors track prices of DeFi tokens and invest in them through a market-capitalization-weighted portfolio designed to track the CoinDesk DeFi Index. 

“Grayscale continues to focus on creating opportunities for investors to access new, exciting parts of the digital asset ecosystem,” says Grayscale Investments CEO Michael Sonnenshein. “The emergence of decentralized finance protocols provides clear examples of technologies that can redefine the future of the financial services industry. We’re proud to offer investors exposure to DeFi through Grayscale’s trusted, secure, and industry-leading investment product structures.” 

Watch Grayscale Investments CEO Michael Sonnenshein speak on the partnership.

CoinDesk Index will provide a benchmark representation of DeFi protocols through various methods, including the liquid DeFi assets on a market capitalization-weighted basis. 

Commenting on the partnership,  Managing Director of CoinDesk Indexes Jodie Gunzberg, says: “This partnership underscores our leadership in creating institutional-grade digital currency indexes. With increasing attention on the innovations within decentralized finance, it’s critical for the investment community to have tools that deliver calculated exposure to this exciting area of innovation. This collaboration offers investors the data and tools they need to gain exposure to decentralized finance into their portfolios.”

CoinDesk DeFi Index has a number of assets and capitalization-based market weightings as of July 1, 2021 can be seen below:

Uniswap (UNI), 49.95 percent

Aave (AAVE), 10.25 percent

Compound (COMP), 8.38 percent

Curve (CRV), 7.44 percent

MakerDAO (MKR), 6.49 percent

SushiSwap (SUSHI), 4.83 percent

Synthetix (SNX), 4.43 percent

Yearn Finance (YFI), 3.31 percent

UMA Protocol (UMA), 2.93 percent

Bancor Network Token (BNT), 2.00 percent.

In Conclusion

• DeFi is a blockchain-based form of finance designed for the trading and lending of cryptocurrencies. It does not rely on a central authority or intermediary but uses smart contract technology.
• Being one of the fast-growing segments of the blockchain ecosystem, it’s estimated that about $50 billion worth of collateral is locked in DeFi protocols. Recently, prices of tokens on DeFi platforms have also soared.
• Just like its other products, Grayscale aims to have shares of its DeFi Fund listed on a secondary market, however, the feasibility is not guaranteed yet.