DeFi News

Grayscale DeFi Fund Now Trading on OTC Markets

Grayscale DeFi Fund Now Trading on OTC Markets

Investors can now access diversified exposure to the DeFi ecosystem through a single, publicly-quoted investment vehicle

Grayscale Investments, the world’s largest digital currency asset manager, announced that Grayscale® Decentralized Finance Fund (DeFi Fund) has begun trading on OTC Markets under the symbol: DEFG. Grayscale now offers 15 digital currency investment products trading on OTC Markets.

“We believe that investors deserve access to the digital currency ecosystem through secure products, and are excited to now offer them exposure to the evolving decentralized finance sub-sector through a publicly-quoted security,” said Grayscale Head of Investor Solutions, Rayhaneh Sharif-Askary.

DEFG enables investors to gain exposure to the price movement of a diversified basket of DeFi digital assets through a singular investment vehicle. DEFG tracks the CoinDesk DeFi Select Index (DFX) and is rebalanced quarterly – allowing investors to avoid the challenges of buying, storing, and safekeeping digital currencies directly.

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The protocols underlying DEFG digital assets seek to democratize access to financial services, such as borrowing, lending, custody, trading, derivatives, asset management and insurance, by removing third-party intermediaries.

SECONDARY MARKET for the PRIVATE PLACEMENT

DEFG has offered a private placement to accredited investors since July 2021. As of December 8, 2022, there were 233,960 Shares outstanding of DEFG. Shares created through DEFG’s private placement become eligible to sell into the public market after a statutory one-year holding period pursuant to Rule 144 of the Securities Act of 1933.*

All investors with access to U.S. securities will be able to buy and sell freely-tradable DEFG shares through their investment accounts, in the same manner as other securities.

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FUND CONSTRUCTION

DEFG provides exposure to a diverse selection of digital assets that meet the fund’s construction criteria through a market capitalization-weighted portfolio (Fund Components). As of December 8, 2022, DEFG’s Fund Components were a basket of 68.88% Uniswap (UNI), 13.00% Aave (AVE), 8.89% Maker (MKR), 5.14% Curve (CRV) and 4.09% Compound (COMP).

The investment objective of DEFG is for the Shares (based on Fund Components per Share) to reflect the value of the Fund Components, determined by reference to the Digital Asset Reference Rate and weighting for each Fund Component less DEFG’s expenses and other liabilities. As of December 8, 2022, each Share represented 1.5431 Uniswap (UNI), 0.0285 Aave (AAVE), 0.0020 Maker (MKR), 1.0763 Curve (CRV) and 0.0147 Compound (COMP). DEFG will not generate any income and regularly distributes Fund Components to pay for its ongoing expenses. Therefore, the amount of Fund Components represented by each Share gradually decreases over time.

The Fund Components consist of the digital assets that make up the DFX as rebalanced from time to time, subject to the Grayscale’s discretion to exclude individual digital assets in certain cases. The composition of DEFG is evaluated on a quarterly basis** to remove existing Fund Components or to include new Fund Components in DEFG’s portfolio, in accordance with the rebalancing of DFX and DEFG’s fund construction criteria established by Grayscale. DEFG may also hold cash and assets arising as a result of a fork, airdrop, or similar event from time to time.***

DEFG is not registered with the Securities and Exchange Commission and is not subject to disclosure and certain other requirements mandated by U.S. securities laws.

GRAYSCALE PRODUCT FAMILY

Grayscale’s investment products are available to institutional and individual accredited investors through their respective periodic and ongoing private placements. In addition to DEFG, Grayscale’s other diversified products are Grayscale Digital Large Cap Fund, which provides exposure to the largest and most liquid digital assets through a market cap-weighted portfolio designed to track the CoinDesk Large Cap Select Index (DLCS), and Grayscale Smart Contract Platform Ex-Ethereum Fund, which provides exposure to a selection of industry-leading Smart Contract Platforms through a market cap-weighted portfolio designed to track the CoinDesk Smart Contract Platform Select Ex ETH Index (SCPXX).

Grayscale also offers investors exposure to digital assets through its single-asset investment products which provide exposure to Basic Attention Token (BAT), Bitcoin (BTC), Bitcoin Cash (BCH), Chainlink (LINK), Decentraland (MANA), Ethereum (ETH), Ethereum Classic (ETC), Filecoin (FIL), Horizen (ZEN), Litecoin (LTC), Livepeer (LPT), Solana (SOL), Stellar Lumens (XLM), and Zcash (ZEC).

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