Grayscale Kicks SushiSwap and Synthetix Out of Its DeFi Fund

Key Insights:

• During the quarterly rebalance, Grayscale made some changes to all its funds.
• Avalanche and Polkadot were added to the Digital Large Cap Fund.
• SushiSwap and Synthetix were cut out of the DeFi Fund.

In a press release today, the world’s biggest crypto asset manager Grayscale Investments announced the quarterly rebalance of their portfolios. For those unversed in this, Grayscale has multiple investment funds which track multiple digital assets within them.

And every three months, these funds are analyzed and based on the investors’ reviews, changes are made to them.

Grayscale Makes New Changes

Now that the second quarter of the year has begun, Grayscale has adjusted its portfolios by removing some assets while also adding some or simply redistributing the money distributed amongst them.

The first was the Digital Large Cap fund (GDLC) which witnessed addition instead of subtraction this quarter.

After adding Solana and Uniswap last quarter, a substantial amount of money was removed from the existing assets to dedicate it to buying two new assets for the fund – Avalanche and Polkadot.

Now holding 1.77% and 1.56% domination in the GDLC, these assets have been given more preference than Litecoin, Chainlink, Uniswap, and Bitcoin Cash.

The second significant change came to the Grayscale DeFi Fund (DeFi Fund), which during this rebalance, lost SushiSwap and Synthetix.

Despite the latter performing exceptionally well over the last couple of weeks in terms of price, Grayscale decided to remove it. Both the assets combined held 6.24% weighting in the DeFi Fund, most of which went to Curve, whose weighting rose from 10.63% to 17.56%.

However, a reduction in asset distribution doesn’t always mean that money is being pulled out of the assets. Grayscale explained this by saying,

“Neither the Digital Large Cap Fund, the DeFi Fund, nor the GSCPxE Fund generate any income, and all regularly distribute Fund Components to pay for ongoing expenses. Therefore, the amount of Fund Components represented by shares of each fund gradually decreases over time.”

The DeFi Pulse Index

Similar to how the Grayscale DeFi Fund works, another DeFi asset tracking fund from Scalara, the DeFi Pulse Index (DPI), is also looking at a rebalance today. While the exact details are yet to be revealed, the elimination of Instadapp from the portfolio has been confirmed.

With 14 DeFi assets under its hood, led by Uniswap, AAVE, and MakerDAO, DPI has performed significantly better this month, rising by 31.43%.

Thus, while GBTC, ETFs, and other spot investment vehicles will have a higher preference, the rise of DeFi funds can also see investors diversifying their money into these indexes.