Grayscale Advisors introduces GDIF, an investment fund targeting PoS network tokens to benefit from staking rewards amid a growing crypto market.
Grayscale has introduced a novel investment opportunity, focusing on specific proof-of-stake (PoS) network tokens while awaiting a verdict from the Securities and Exchange Commission (SEC) regarding its Ethereum exchange-traded fund (ETF) application.
Grayscale Advisors LLC, a subsidiary of the entity behind the foremost Bitcoin (BTC) ETF, has unveiled its latest offering to capitalize on the flourishing crypto market and the escalating staking ratios observed on blockchains like Ethereum (ETH).
The newly introduced Grayscale Dynamic Income Fund (GDIF) is designed to invest in PoS native tokens, aiming to generate yield and distribute quarterly income to investors.
Staking, an inherent feature of PoS blockchains, allows participants to secure decentralized networks and validate transactions by locking up cryptocurrencies for a specific duration. Staked coins typically accumulate rewards for users, often in the form of native tokens originally staked.
Ethereum, the largest PoS network supporting staking, currently has over 25% of its circulating ETH supply locked on its beacon chain, totaling more than $115 billion in staked Ether, according to crypto.news.
The GDIF, while not directly investing in Ethereum staking, will encompass nine PoS staking assets: Aptos (APT), Celestia (TIA), Coinbase Staked Ethereum (CBETH), Cosmos (ATOM), Near (NEAR), Osmosis (OSMO), Polkadot (DOT), Sei (SEI), and Solana (SOL).
As our inaugural actively managed fund, GDIF represents a significant expansion of our product suite, allowing investors to engage in multi-asset staking through the convenience of a singular investment vehicle. Michael Sonnenshein, Grayscale CEO
Grayscale Embraces Staking Amid Regulatory Scrutiny
Grayscale's decision to launch a fund centered on staking comes at a time when U.S. authorities are closely examining crypto practices across multiple agencies, including the SEC.
While 55% of Singaporean crypto users engage in crypto staking, regulatory bodies like the U.S. SEC have cracked down on this feature, citing concerns related to investor protection and securities violations. Platforms such as Kraken have faced fines and were compelled to discontinue their crypto-staking services for American investors.
Despite regulatory scrutiny, data indicates that this regulatory pattern has not significantly deterred Ethereum proponents, particularly as the rate of ETH staking continues to rise. Notably, U.K. authorities are leaning towards regulating the staking market rather than outright outlawing it.