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Why is Cardano not included in Grayscale’s staking fund?


Cryptocurrencies present new financial prospects that should be exploited by both individual investors and institutional entities. The staking process plays a crucial role in decentralizing and securing the blockchain, with protocols incentivizing participants through the distribution of new coins. This promise of assured returns appeals to all market players. Grayscale has launched the Grayscale Dynamic Income Fund (GDIF), which includes nine proof-of-stake blockchains. It is worth thinking about the blockchains selected by Grayscale and the implications this has for the crypto industry. In this article, we’ll examine the goals of the GDIF and explore why it primarily features lesser-known projects.

The Digital Currency Group, which operates Foundry USA, the largest Bitcoin pool, and owns Grayscale, has been an important player in the professionalization of Bitcoin mining. This sector is increasingly dominated by large companies, often multinationals. The process of earning rewards through the Bitcoin protocol has proven to be a lucrative business.

Institutions are now recognizing a parallel opportunity in staking. Grayscale introduced the Grayscale Dynamic Income Fund (GDIF), which integrates nine proof-of-stake blockchains. The main objective of the fund is to distribute rewards in US dollars every quarter. We will likely soon see the emergence of other staking funds similar to GDIF.

It is a pertinent question to consider the impact of institutional investment on Proof-of-Stake (PoS) blockchains. In essence, while this could potentially decrease decentralization by leading to the emergence of new entities owning a substantial amount of coins, it could also increase security by making a 51% attack more costly.

Coin holders will likely welcome this, as institutional investments could drive up the market value of PoS coins. However, this comes with its own set of risks. Institutions have the power to inflate coin prices through purchases, but they can also cause prices to fall if they lose interest in a specific project. But is there a compelling reason to stop staking? We will delve deeper into this topic later.

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