GrayScale Launches DeFi Fund to Penetrate Traditional Markets in Conjunction with CoinDesk

There’s no denying the attraction of Decentralization Finance for its organizational benefits, and the most prominent crypto management group is taking notice.

Diving Into DeFi

The largest crypto investment firm, Grayscale Investments, has started a DeFi Index Fund that features popular DeFi tokens. The firm’s involvement is indicative that Decentralized Finance (DeFi) is hitting the mainstream.

It will be indexed from the CoinDesk Indexes, and Genesis Global Trading will approve each token choice. The fund will be a welcoming step by GrayScale to expose traditional investors to the potentials of DeFi. 

The CEO of Grayscale Investments, Michael Sonnenshein, joined Coindesk’s First Mover program for a round of questions.

Sonnenshein preached positivity about the DeFi industry for his clients: “The emergence of decentralized finance protocols provide clear examples of technologies that can redefine the future of the financial services industry. We’re proud to offer investors exposure to DeFi…”


The latest ventures by Grayscale continue to indicate warming to the DeFi industry by traditional investors. Sonneshein indicated that investors are looking for a more sharing economy going forward, and there is no better industry to achieve that than through the benefits of DeFi. 

The announcement from July 19 surely is an acknowledgment of the mainstream to the transformative powers of DeFi.

Details of the Fund

The Grayscale index will feature a majority of Ethereum-based tokens, notably an initial weight of 49.95% towards UniSwap alone. Aave is the only other token to take over 10% over the Index at just 10.25%. UniSwap essentially acts as a benchmark to the fund. The index does not feature Binance. 

The fund is only open to substantial investors who meet institutional accreditation and specific eligibility requirements. The idea is to provide crypto with regulation for the customers at GrayScale. 

The Index consisted of the following assets and their percentages at the start of July:

Uniswap (UNI): 49.95%

Aave (AAVE): 10.25%

Compound (COMP): 8.38%

Curve (CRV): 7.44%

MakerDAO (MKR): 6.49%

SushiSwap (SUSHI): 4.83%

Synthetix (SNX): 4.43%

Yearn Finance (YFI): 3.31%

UMA Protocol (UMA): 2.93%

Bancor Network Token (BNT): 2.00%

According to their press release on July 19, Grayscale said it is the firm’s second diversified fund offering of just fifteen overall investment products. The DeFi Index incorporates liquid DeFi assets weighted by market cap metrics.

Complete details of the fund are provided by Trade Block. 

The Need For Security

Sonnenshein stressed the need for regulated counterparties and the need to know the source of funds. He defined DeFi to the hosts at CoinDesk as when traditional financial services meet distribution. GrayScale looks to discover the DeFi ecosystem for traditional investors through the best ten projects they can offer within their understanding of safety from regulatory scrutiny. 

The exposure to DeFi is only beginning for traditional investors. GrayScale has begun listing ten projects, and traditional finance seems to seek a more distributed and potentially fair financial paradigm. 

The world of DeFi is flourishing into an ecosystem much more profound than Ethereum can handle. Sonnenshein was not shy to say that projects on Ethereum will not dominate the future of DeFi. 

The CoinDesk panel noted that Congress is playing coy with DeFi. However, the move investors get a taste of the DeFi pie, they will want clarity regarding regulation. Binance has been working to meet the needs of regulators as of late, it could become hard to ignore the largest chain in the world.

Sonnenshein agreed regulation would be an excellent thing and that the concerns of illicit activity have no place in his fund. The need for know-your-customer and anti-money laundering mechanisms could help bridge traditional investors to DeFi.


About GrayScale and CoinDesk

Digital Currency Group (DCG) owns bothGrayscale and CoinDesk. Both are wholly-owned subsidiaries to one of the largest private investors in crypto. DCG calls itself the “epicenter” of bitcoin and blockchain. They build a variety of services in crypto and engage in trading. CoinDesk works independently of DCG. 

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