Tag: defi fund

Grayscale Pairs with Coindesk Index to Launch DeFi Fund and Index

Grayscale Investments LLC announced Monday to launch its 15th investment product, a DeFi fund and index, which focuses on decentralised finance (DeFi) tokens.

Michael Sonnenshein, the CEO of Grayscale crypto asset management firm, talked about the development and said that the company had begun a fund that targets DeFi tokens like Aave and Uniswap for its institutional investors.  

The new index is designed to help investors tracking DeFi tokens and investing in them. As of July 1, a DeFi -particular index, created by CoinDesk’s TradeBlock, started tracking the new fund whose 10 DeFi blue chips include Bancor (BNT), UMA Protocol (UMA), Yearn Finance (YFI), Synthetix (SNX), SushiSwap (SUSHI), MakerDAO (MKR), Curve (CRV), Compound (COMP), Aave (AAVE), and Uniswap (UNI).

Sonnenshein said that the firm had seen interest in a wide base of its existing investors and the increasing interest in popular cryptocurrencies in the decentralised finance ecosystem. The CEO, therefore, mentioned that the rising user adoption in DeFi protocols triggered Grayscale to launch an institutional-grade index and a DeFi fund:

“The emergence of decentralised 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,” 

In a statement, the Fund is now open for daily subscription by the eligible individual and institutional accredited investors. 

Grayscale’s plans for Bitcoin ETF  

As mentioned above, the new DeFi fund is Grayscale’s 15th investment product, which is the second diversified fund launched after another diversified fund called the Digital Large Cap Fund.

Last week, Grayscale approved its Digital Large Cap Fund to become an SEC-reporting company. Already two of the firm’s other cryptocurrency investing products, namely the Grayscale Bitcoin Trust and the Grayscale Ethereum Trust, are SEC reporting companies.

The development about becoming an SEC reporting outfit is vital as Grayscale said that the aim is to provide the investors with a higher level of disclosure and reporting besides the already stringent obligations to which its products adhere.  

Grayscale also recently said that its crypto products are designed with the focus of eventually becoming Exchange Traded Funds (ETFs). The firm stated that becoming an SEC reporting is the final step for their products before transforming into an ETF.

Bloomberg and Galaxy Digital Floats Crypto Index for Decentralized Finance

The growing strides of Decentralized Finance (DeFi), a fast-growing offshoot of blockchain technology, has yet gained a boost as Bloomberg and Galaxy Digital joins forces to launch the Bloomberg Galaxy DeFi Index (ticker: DEFI).

Targets of the New Benchmark

The Bloomberg Galaxy DeFi Index is a benchmark designed to measure the performance of the largest decentralized finance (DeFi) protocols by market value that independently offer financial services. These protocols are governed by a uniquely designed smart contract and have no interference with a central financial intermediary, such as brokerages, exchanges, or banks.

The index fund is owned by Bloomberg, with co-branding with Galaxy Digital. The fund constituents are designed to take a minimum holding of 1% and a maximum of 40%. As of August 1, only Uniswap (UNI), the Automated Market Maker (AMM) powered decentralized exchange is the only constituent with 40% weighting. 

The other constituents of the fund includes; AAVE (AAVE) 18.0%, Maker (MKR) 12.7%, Compound (COMP) 10.0%, Yearn.Finance (YFI) 5.4%, Synthetix (SNX) 5.0%, SushiSwap (SUSHI) 4.3%, 0x (ZXR) 2.8%, and UMA (UMA) 1.8%. Neither of these constituents is occupying a permanent position, the index will be reviewed month with possible additions or subtractions.

A New Tool to Monitor the Growth in DeFi

The world of DeFi has seen massive growth thus far this year. The total value locked by DeFi protocols grew from $20 billion as of December 2020 to $79.49 billion at the time of writing, according to DeFi Pulse. The Bloomberg Galaxy DeFi Index will further help keep track of this fast-growing market niche.

“The blockchain-based infrastructure behind DeFi is maturing at an accelerating rate, and clear examples of how this new technology can disrupt financial services are emerging in real-time. This partnership with Bloomberg and our DeFi Index Fund provides investors with data and tools that deliver calculated exposure to the future of financial services,” said Steve Kurz, Partner and Head of Asset Management at Galaxy Digital.

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