Digital asset manager Grayscale has launched the Grayscale MakerDAO Trust, a new fund that offers accredited investors exposure to Maker (MKR), the utility and governance token for MakerDAO. MakerDAO is renowned for creating the DAI stablecoin on the Ethereum blockchain, which ranks as the third-largest stablecoin globally behind Tether and USD Coin.
A Close-Ended Fund: Not Your Typical Crypto ETF
One crucial point to understand about this new offering is that it is structured as an investment trust rather than an exchange-traded fund (ETF). Unlike ETFs, investment trusts are close-ended, meaning they have a fixed number of shares and are not as easily traded on exchanges. This structure can lead to the fund's shares trading at prices that differ from the actual value of the assets it holds, known as the net asset value (NAV).
Because the Grayscale MakerDAO Trust is not traded on exchanges, it is initially only accessible to accredited investors—those who meet specific financial criteria. Additionally, the trust does not permit redemptions, meaning investors must hold their shares for at least a year before they can be resold in the secondary market.
Comparisons with Previous Grayscale Offerings
Grayscale's strategy with the MakerDAO Trust mirrors their previous approach with bitcoin and ether, which were also initially structured as trusts. These were later converted into ETFs after receiving approval from the U.S. Securities and Exchange Commission (SEC). However, it's important to note that not all trusts are guaranteed to become ETFs.
Recent Developments and Market Reaction
This launch is part of Grayscale's broader efforts to offer trusts for various cryptocurrencies. Earlier in August, they introduced trusts for Bittensor and Sui tokens. The announcement of the MakerDAO Trust prompted a roughly 5% increase in the price of MKR, indicating a positive market reaction.
For investors, this new fund presents an opportunity to gain exposure to the MakerDAO ecosystem, but with the caveat of limited liquidity and access. The trust carries a 2.5% management fee, reflecting the costs associated with managing and maintaining the fund.
