World’s biggest digital currency asset manager launches a DeFi fund

NEW DELHI :

US-based Grayscale Investments LLC, which has digital assets under management (AUM) of around $30 billion, has launched an institutional decentralized finance, or DeFi fund, which offers exposure to a selection of industry-leading DeFi protocols.

DeFi refers to the decentralized financial services built on top of distributed blockchain networks with no central intermediaries such as banks, custodians and exchanges. Examples of DeFi protocols include decentralized exchanges, decentralized borrowing and lending platforms as well as stablecoins.

A stablecoin is a digital currency that is linked to an underlying asset such as a national currency such as the US dollar or a precious metal such as gold.

According to the asset manager, over the past year, DeFi applications have grown over 20 times to $55 billion in total value locked—the total amount of assets collateralized with these services.

The Grayscale DeFi Fund comprises 10 tokens, which represent several use cases for these applications, including DEXs, lending, derivatives, and asset management.

The 10 tokens are Uniswap, Aave, Compound, Curve, MakerDao, SushiSwap, Synthetix Network Token, Yearn Finance, Universal Market Access and Bancor Network Token.

Grayscale DeFi Fund offers investors exposure to a selection of industry-leading DeFi protocols through a market-capitalization-weighted portfolio designed to track the CoinDesk DeFi Index.

The asset manager would be raising assets for the fund through a private placement offering, whereby investors will be eligible to purchase shares at a daily net asset value. The fund will carry a 2.5% annual fee, while there will be no upfront or performance fee.

Grayscale has 15 investment products, in which accredited investors get exposure to the digital currency asset class in the form of a security without the challenges of buying, storing, and safekeeping digital currencies directly.

Grayscale’s investment products include six publicly-traded investment vehicles—Grayscale Bitcoin Trust, Grayscale Bitcoin Cash Trust, Grayscale Ethereum Trust, Grayscale Ethereum Classic Trust, Grayscale Litecoin Trust, and Grayscale Digital Large Cap Fund.

The company also intends to quote shares of Grayscale DeFi Fund on a secondary market as well.

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