Grayscale Investments has confirmed an investment fund customized for sophisticated clients eager to expose their portfolios to income generated from staking crypto tokens.
Based on a recent official statement, the Grayscale Dynamic Income Fund is just available to clients with over $1.1 million in assets under management (AUM) or a net worth of over $2.2 million. Based on these amounts, it indicates that the retail clients are not well-suited for this product.
The fund aims to change staking rewards into United States dollars weekly, with defined distributions planed quarterly for the investors. Moreover, Grayscale alleges that careful analysis will be done to choose the proof-of-stake (PoS) tokens included in the fund’s portfolio.
In that context, Grayscale manages the complexity of staking and unstaking multiple tokens as every token has its unique timelines and needs to be staked and unstaked. Although staking generally offers a more stable and predictable form of earning, crypto trading using tools like Finance Phantom guarantees increased profits for market traders.
The key priority of the fund is to increase staking income from the assets, with capital growth as a secondary focus, as highlighted by Grayscale.
Crypto staking features the holding of cryptos in a wallet to support the operations and activities of a blockchain network. In return, stakers earn rewards, normally in the form of extra tokens, for their contribution to network security and validation of the involved transactions.
Staking offers a way for crypto holders to participate in network governance and earn some passive income. In general, staking guarantees the secure and efficient operation of the blockchain network.
Grayscale Crypto Investment Fund Operation
Grayscale has named up to three PoS tokens that will be held in the fund: Solana (SOL) has a 20% share, Osmosis (OSMO) has 24%, and Polkadot (DOT) has 14%. However, 43% is categorized under other tokens.
OSMO now offers a staking reward rate of 11.09%, SOL provides 7.42%, and DOT is at 11.9%, based on Staking Rewards data. Nevertheless, just SOL ranks among the top 10 PoS tokens by market capitalization, according to CoinMarketCap data.
In the meantime, Grayscale’s spot Bitcoin exchange-traded fund (ETF), which was launched on January 11, has seen billions of outflows.
On March 26, reports emerged that the Grayscale Bitcoin Trust recorded daily outflows reaching over $14 billion since its launch.
Notably, Grayscale’s Bitcoin ETF charges a 1.5% per annum management fee, which is five times that of the 0.30% average of the other spot Bitcoin ETFs.
Grayscale has now applied for an Ethereum Futures ETF, but the United States Securities and Exchange Commission (SEC) recently delayed a decision on whether to approve this product.
