Grayscale Investments Launches a Trust With Solana, An Ethereum Rival

Bob Coiney

December 1, 2021

In recent news, Grayscale, a leading digital asset investment firm, is launching a new product that provides exposure to Solana, one of the most popular digital assets globally. The Solana Trust will be the 16th option in Grayscale’s growing product range for institutional and high-net-worth investors.

The Solana network, like the Ethereum network, is one of several initiatives aimed at expanding blockchain’s utility beyond that of a peer-to-peer payment system. As an alternative to pure Proof-of-Stake (PoS) and Proof-of-Work (PoW) blockchains, the Solana protocol proposed the Proof-of-History (PoH) consensus mechanism.

Why Solana?

It’s simple to see why Grayscale would want to expose Solana to its community. Though its growth was reduced this month due to overall market turmoil, the blockchain’s native token SOL is still one of the finest assets in 2021, particularly among large cryptocurrencies, with a year-to-date gain of 687 percent. These returns surpass those of several of its main competitors, including Ethereum, Algorand, Cardano, and Polkadot, which are all seeking to be the leading platform for decentralized finance applications, non-traditional transactions, and cryptocurrency games. Avalanche, Solana’s only other big competitor, has increased 680 percent in 2020 but only has a fraction of Solana’s market valuation.

Solana is also the favored platform of Sam Bankman-Fried, the 29-year-old founder of crypto exchange FTX and the industry’s richest person with a personal fortune of $26.5 billion. His outspoken support for the network has been essential in raising its public profile among companies and builders.

Reaction to the New

Grayscale CEO Michael Sonnenshein reacted to the latest addition and pointed out that Grayscale is thrilled to extend its offerings and foster crypto adoption. He said, “For the last eight years, Grayscale has been at the forefront of offering investors efficient exposure to the ever-evolving digital currency ecosystem.“We have had a front-row seat to the mainstream acceptance and adoption of crypto and increasingly find that investors are diversifying their exposure beyond digital assets like Bitcoin and Ethereum. Our family of Grayscale products will continue to expand alongside this exciting asset class, as we remain committed to offering investors opportunities to access the digital economy.”

Speaking on why he chose Solana, Sonnenshein noted that Solana’s near and long-term potential in spotting new use cases for blockchain technology was a strong bait aside from its performance. He said, “What’s been interesting about Solana is that it gives users the ability to learn, experiment, and build. They generally have more budget to experiment on the protocol than some other more established blockchains like Ethereum, because of lower transaction fees.” 

Bitcoin (BTC), Basic Attention Token (BAT), Bitcoin Cash (BCH), Chainlink (LINK), Decentraland (MANA), Ethereum (ETH), Ethereum Classic (ETC), Filecoin (FIL), Litecoin (LTC), Livepeer (LPT), Stellar Lumens (XLM), Zcash (ZEC), and Horizen (HOR) (ZEN) are Grayscale’s other product of which Solana will be joining.

 Grayscale also provides thematic exposure to digital assets through its diversified products, Grayscale Digital Large Cap Fund, which covers the top 70% of the digital currency market by market capitalization, and Grayscale DeFi Fund, which tracks the CoinDesk DeFi Index through a market-capitalization-weighted portfolio.

Grayscale’s investment products are available through periodic private placements to institutional and individual authorized investors.