Grayscale, one of the world’s largest digital asset managers, has launched a new fund providing exposure to a variety of smart contract ecosystems except Ethereum’s native token, Ether, underscoring the growing interest of investors for alternative blockchain networks.
The Grayscale Smart Contract Platform ex Ethereum Fund (GSCPxE) holds Cardano (ADA), Solana (SOL), Avalanche (AVAX), Polkadot (DOT), Polygon (MATIC), Algorand (ALGO) and Stellar (XLM) in the following weights, 24.63%, 24.27%, 16.96%, 16.16%, 9.65%, 4.27% and 4.06% respectively.
The idea, according to Grayscale CEO, Michael Sonnenshein, is to enable investors to have a stake in a variety of developing platforms rather than betting on one to emerge as the primary venue for decentralized activity.
What you should know
- Sonnenshein stated, “Smart contract technology is critical to the growth of the digital economy, but it’s still too early to know which platform will win. From attracting and retaining the most vibrant developer communities to ensuring the platform is high-speed, flexible, and scalable.
- “The beauty of GSCPxE is that investors do not have to choose one winner, and instead can access the development of the smart contract platform ecosystem through a singular investment vehicle.”
- The fund uses an index offered by CoinDesk indices to track the assets, with the portfolio’s holdings weighted by market capitalization. Cardano and Solana are the two highest weights in the fund, each making up more than 24% of its holdings. Avalanche and Polkadot follow with each making up 16%.
- Ethereum’s dominance as the premier smart contract platform is being challenged by competitors that claim to offer superior transaction speeds, lower costs and higher throughput capacity.
- We are seeing a very strong challenge for Cardano and its native token ADA. According to Messari, Cardano just recently flipped Bitcoin and Ethereum in transaction volume over the last 24 hours.
- While Ethereum continues to dominate the decentralized application space, the DeFi industry is becoming a more level playing field. Currently, Ethereum accounts for just over 55.4% of the total value locked on DeFi protocols, down from over 96% in January 2021, according to DeFi Llama.
This is Grayscale’s third diversified fund, following its Decentralized Finance Fund and its Digital Large Cap Fund. At the start of this year, it announced a reshuffling of assets in its Decentralized Finance Fund as part of its quarterly rebalancing, removing Bancor and UMA and adding AMP.
Grayscale is by far the world’s largest digital asset manager with over $36 billion in assets under management as of March 22. Assets under management reached as high as $60 billion in November 2021, when Bitcoin hit a new all-time high.