Polygon Trust and Crypto Economy ETF hit the market

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Osprey Funds’ support for the Ethereum Polygon (formerly Matic Network) -enabled blockchain comes after the company launched an offering earlier this month focused on Layer 1 Solana. Digital, Riot Blockchain, MicroStrategy and Square

Osprey Funds has launched the first US fund to invest exclusively in the native token of the Polygon network, while First Trust Advisors and SkyBridge Capital have released a new actively managed ETF that will buy shares of crypto and digital economy companies. .

A protocol for developing blockchains on top of Ethereum, Polygon takes advantage of Ethereums’ secure network while mitigating common blockchain issues, such as high gasoline costs and slow transactions, according to Greg King, CEO Osprey Funds.

Polygon is convincing for the flexibility it brings to ETH, King told Blockworks in an email. It’s not just a Layer 2 scaling solution, it provides a set of tools that facilitate new [decentralized apps] while being part of the Ethereum ecosystem.

Its native token, $ MATIC, was priced at $ 1.12 as of 1:30 p.m. EST on Tuesday, according to CoinGecko, which has fallen 10.6% in the past seven days. Polygons’ market capitalization was just under $ 7.5 billion at that time.

Although often described as Layer 2, Polygons’ security model is based on an independent set of validator nodes that dot $ MATIC and participate in the validation of transactions. Polygon periodically creates checkpoints recorded on the Ethereum mainnet, approximately every 10 minutes, of its state, a snapshot of its transaction record. This increases its security compared to some blockchains, but the Proof-of-Stake validation chain, an entirely separate blockchain, is quite different from Layer 2 implementations built on the Ethereum mainnet, like Optimism and Arbitrum, that inherit Ethereums security directly through the use of “optimistic rollups”.

Branching out

The launch of Ospreys comes about two weeks after the New York-based digital asset manager launched the Osprey Solana Trust for a private placement. It also offers products focused on Bitcoin, Polkadot, and Algorand.

Like the Solana Trust, the Polygon Trust is currently available to accredited investors and has a minimum investment of $ 10,000. Osprey intends to list the fund on the OTCQX market and has agreed to waive the management fee for all investors until January 2023.

King told Blockworks at the time that the company was focused on launching market-leading funds that follow promising Layer 1 protocols. Although he called Solana and Algorand potential challengers of Ethereum, he said Osprey remains supportive of Ethereum.

Tushar Jain, Managing Partner of Multicoin Capital, argued at the Blockworks Digital Asset Summit last week that Layer 1 blockchains are currently more reliable than Layer 2s built on them. Ava Labs president John Wu said in a separate session of the conference that the new wave of layers 1 is where the savings will be.

Our future product development will continue to focus on Diapers 1, King said on Tuesday, but Diapers 2 and beyond are possible as we expand the Osprey product set.

Wider crypto exposure in an ETF

Also on Tuesday, First Trust unveiled an actively managed ETF under-advised by SkyBridge Capital.

The SkyBridge Crypto Industry and Digital Economy (CRPT) First Trust ETF seeks to invest at least 80% of its net assets in US stocks and deposit receipts of crypto and digital economy companies. It will not invest directly in digital assets or indirectly through the use of derivatives or through investments in funds or trusts that hold them.

Anthony Scaramucci, founder and managing partner of SkyBridge, said in a statement that the adoption of cryptocurrency represents the biggest macro trend since the commercialization of the internet. The fund, which costs 85 basis points, will be managed by Scaramucci and Brett Messing, chairman and co-chief investment officer of SkyBridges.

The top five holdings of CRPT are Coinbase, Marathon Digital, Riot Blockchain, MicroStrategy and Square, noted Eric Balunchas, senior analyst at Bloomberg Intelligence, in a Twitter post.

The fund’s biggest new competitor will be the transformational data-sharing Amplify Investments ETF (BLOK), which has nearly $ 1.3 billion in assets. This actively managed product, launched in January 2018, has an expense ratio of 71 basis points.

VanEcks Digital Transformation ETF (DAPP) and Bitwise Asset Managements Crypto Industry Innovators ETF (BITQ), are index offerings launched in April and May respectively. DAPP costs 50bp, while BITQ is 85bp.

The honest truth is that there are so few companies that are even remote from pure games in space that they all look remarkably alike, Dave Nadig, chief investment officer and chief research officer at Blockworks, told Blockworks. ETF Trends. The top ten for BITQ, DAPP and CRPT are all essentially the same if not very close, with the weighting schemes being the main difference.

While I think it’s great that there are so many options, choosing between them is extremely difficult based on anything but a very sketchy set of analyzes, Nadig added. Do you want indexed or not, what kind of concentration can you withstand, how long do you plan to hold and therefore how sensitive are you to fees?

Other funds in the space include the Siren Nasdaq NexGen Economy ETF (BLCN), Capital Link Global Fintech Leaders ETF (KOIN) and First Trusts owns Indxx Innovative Transaction & Process ETF (LEGR). Invesco revealed in June its intention to launch a Crypto Economy ETF that would invest primarily in well-established crypto companies and up to 10% in Bitcoin futures.

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Ben strack

Ben Strack is a Denver-based reporter covering macroeconomics, financial services, and digital asset management. Prior to joining Blockworks, he covered the asset management industry for Fund Intelligence, and was a reporter and editor for various local newspapers on Long Island. He graduated from the University of Maryland with a journalism degree.

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