Grayscale Adds Lido (LDO) to DeFi Fund, Becoming Second-Largest Holding

Summary: Grayscale has introduced Lido (LDO) to its DeFi fund for the first time since its launch in July 2021. The DeFi fund currently holds 19.04% of Lido, making it the second-largest holding in the portfolio. Uniswap dominates with 45.46% of the total. Lido is a liquid staking service and token designed to lower Ethereum's cost.

Since the product’s launch in July 2021, Grayscale has introduced lido to its DeFi fund for the first time. On Friday, the digital asset management made the announcement. Grayscale’s DeFi fund currently holds 19.04% of Lido (LDO), making it the second-largest holding in the portfolio. Uniswap (UNI) continues to dominate, making up 45.46 percent of the total.

Banking on Lido (LDO)

Lido is a liquid staking service that also provides a token designed to lower the cost of staking Ethereum. Lido’s most sought-after offering, staked Ethereum (stETH), ranks eighth among all cryptocurrencies on CoinGecko. The success of STETH has increased the value of LDO, the Lido governance token.

Following the lead of its index provider, CoinDesk’s DeFi Select Index (DFX), Grayscale included LDO formally on Thursday evening.

Evaluation Each Quarter

Each quarter, CoinDesk evaluates all indexes, including the DeFi index. The second working day of each of January, April, July, and October is set aside for any necessary adjustments. Digital assets in the DeFi industry are “designed to measure the market capitalization weighted performance” using DFX.

CoinDesk Indices informed that “for the first time in our April reconstitution,” LDO satisfies the market cap and liquidity standards for DFX.

As of March 15th, 2023, the Grayscale DeFi Fund was otherwise comparable, with the addition of LDO being the most notable difference. Nearly two years ago, Uniswap, Aave, and Compound Finance (COMP) were the fund’s three largest holdings. Synthetix (SNX) has increased its market share over time.

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With just $3.1 million in AUM, the DeFi Fund is one of Grayscale’s more modest offerings. Grayscale Bitcoin Trust (GBTC) is the company’s main product and has over $18 billion in assets. Since its inception, the DeFi fund has lost more than 73% of its value.

Ravi Kumar