Grayscale just launched a new DeFi fund. But is 50% of that Uniswap (UNI)?
3 min readLeading crypto asset management company Grayscale Investments has announced that it would be launching a DeFi Fund and Index, the firm second-ever diversified investment product, as per a release today.
Today we’re unveiling Grayscale DeFi Fund, our second diversified investment product, which tracks the @CoinDesk #DeFi Index. Accredited Investors are now able to gain exposure to a selection of industry-leading DeFi protocols through the Fund. Learn more: https://t.co/i0hm9vrklB pic.twitter.com/QASEp9SpfK
— Grayscale (@Grayscale) July 19, 2021
Decentralized finance (DeFi) is a burgeoning crypto niche that has recorded some level of success in the last year. Such protocols do not need the interference of third parties, like banks or other financial institutions, to offer traditional financial services to users, and instead, rely on the extensive use of smart contracts (which are mostly built on ETH).
Grayscale Enters Defi
Tthe Fund will enable investors to have exposure to selected leading DeFi protocols. “Grayscale DeFi Fund (the Fund) provides investors with exposure to a selection of industry-leading DeFi protocols through a market-capitalization-weighted portfolio designed to track the CoinDesk DeFi Index,” the firm said in the release.
Micheal Sonnenshien, the CEO of the firm, noted that the DeFi products could change the face of the financial world. In his words “the emergence of decentralized finance protocols provide clear examples of technologies that can redefine the future of the financial services industry.” He continued that “we’re proud to offer investors exposure to DeFi through Grayscale’s trusted, secure, and industry-leading investment product structures.”
This means investors would be able to invest in DeFi protocols like UniSwap, Aave, Compound, and other top DeFi products.
Sonnenshien also hinted that this might not be the last of the crypto products of the firm. According to him “Grayscale (will) continues to focus on creating opportunities for investors to access new, exciting parts of the digital asset ecosystem.”
Uniswap making a majority?
As such GrayScale’s DeFi Index is set to track the Coindesk DeFi Index, which itself has 10 Defi protocols on its list.
Uniswap makes up 50% of the total market cap of all of the assets on that index. Aave has 10.25% while Compound has 8.38%. Other notable protocols on the index include Bancor Network, Yearn Finance, Sushiswap, Curve, MakerDAO, etc.
Already, the crypto-related company offers trust for leading crypto assets like BTC, ETH, Cardano, and other top digital coins. The firm is also working on converting its BTC Trust into an exchange-traded fund and has enlisted the help of one of the oldest banks in the United States, BNY Mellon, to help it achieve its goal.
Crypto Community Reacts
The announcement by the firm has birthed different levels of reactions from the crypto community on Twitter. While some have welcomed this new fund as a welcome development, others believe that the investment firm should be more focused on fixing its negative GBTC premium.
Some Twitter users also highlighted some Defi protocols they believe the fund should be investing in. According to some of them, Pancakeswap should have been one of the protocols being invested in.
No @PancakeSwap ? Why, it is one of the biggest players in DEFI.
— Thrillbits (@Thrillbits) July 19, 2021
While another user raised concerns on why almost half of the funds are being invested in Uniswap. To them, they believe this could be evenly spread across various protocols in the space.
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