Institutional interest fades for SushiSwap and Synthetix as Grayscale removes them from DeFi Fund

  • Both SUSHI and SNX failed to meet the minimum required criteria of market cap for the Grayscale DeFi Fund.
  • Grayscale has added three new cryptos – Polkadot, Avalanche and ATOM – across its crypto funds.

As part of its quarterly rebalancing, crypto asset management giant Grayscale ousted SushiSwap (SUSHI) and Synthetix (SNX) from its DeFi fund portfolio. Grayscale dropped both SUSHI and SNX as the two cryptocurrencies failed to meet the qualifying criteria of minimum market capitalization.

Grayscale launched its decentralized finance (DeFi) fund last year in July 2021 following a strong rally in the DeFi market. It now has more than $8 million in net assets under management. After the removal of SushiSwap (SUSHI) and Synthetix (SNX), the digital assets currently in Grayscale’s DeFi fund include Aave, Uniswap, Curve, MakerDAO, Yearn.Finance, Amp, and Compound.

The recent ouster shows that there’s been waning institutional demand for SUSHI and SNX. Going ahead, this could possibly reflect in the prices of these two cryptocurrencies.

Furthermore, Grayscale added three new digital assets – Polkadot, Avalanche and ATOM – across its crypto funds. Of these, Polkadot (DOT) and Avalanche (AVAX) found a spot in Grayscale’s Large Cap fund. On the other hand, cosmos (ATOM) made its way to Grayscale’s Smart Contract Platform Ex-Ethereum Fund (GSCPxE Fund).

Grayscale Launched the GSCPxE Fund just last month in March 2022. Its current holdings include some of the emerging cryptocurrencies like Solana, AVAX, Cardano (ADA), Polygon (MATIC), Polkadot (DOT), Stellar (XLM), Algorand (ALGO) and now Cosmos (ATOM).

Grayscale is the world’s leading crypto manager with $44 billion in assets under management. The Grayscale Bitcoin Trust (GBTC) is the largest fund alone contributing $30 billion in AUM.

SushiSwap’s Recent Challenges

Decentralized exchange SushiSwap was facing some internal challenges recently. In December 2021, SushiSwap’s CTO Joseph Delong stepped down citing internal chaos and infighting. Delong said “the chaos that is occurring now is unlikely to result in a resolution that will leave the DAO as much more of a shadow than it once was without a radical structural transformation”.

Furthermore, the SushiSwap community also proposed a legal structure for the decentralized autonomous organization SushiDAO to mitigate future risks. The participants for the SushiSwap DEX have voted for the creation of a non-profit organization. The larger goal is to provide legal certainty and reduce risks for developers and token holders.

As of press time, SushiSwap (SUSHI) is trading 9% down at a price of $3.63 and a market cap of $466 million. Since the beginning of 2022, SUSHI has lost almost two-thirds of its value and 75 percent over the last year.

Synthetix (SNX) is also down 6.5 percent at press time and is currently trading at $5.71 with a market cap of $656 million. The SNX crypto has corrected by over 50 percent over the last week and is trading at no gains year-to-date.