Grayscale Adds Ondo Finance to DeFi Fund, Replaces Polkadot with Hedera in Smart Contract Fund

Grayscale Investments has completed its Q2 2025 quarterly rebalancing across its crypto-focused funds, introducing new strategic allocations that reflect the evolving landscape of the digital asset market. The asset manager made notable changes to its DeFi Fund and Smart Contract Fund, while also fine-tuning the holdings within its Decentralized AI Fund.

One of the most significant updates came in the DeFi Fund, where Grayscale added Ondo (ONDO) for the first time. The move marks a major milestone for the asset, which now makes up 18.22% of the fund. The inclusion was funded by trimming minor allocations from other holdings. Uniswap (UNI) and Aave (AAVE) remain dominant positions in the DeFi Fund, accounting for 34.01% and 30.74% respectively. Other holdings include MakerDAO, Curve, and Lido, offering investors diversified exposure to the decentralized finance sector.

In the Smart Contract Platform Fund, Grayscale removed Polkadot (DOT) and introduced Hedera (HBAR) as its replacement. This shift comes as part of a broader reallocation strategy that reflects changing developer momentum and ecosystem growth. Post-rebalancing, Ethereum (ETH) and Solana (SOL) continue to lead the fund with just over 30% allocation each. Other assets held include Cardano (ADA), Sui (SUI), and Avalanche (AVAX). HBAR’s addition suggests growing confidence in Hedera’s enterprise-grade distributed ledger and its energy-efficient consensus model.

Grayscale’s Decentralized AI Fund did not add or remove any tokens this quarter. However, the company rebalanced asset weights to better reflect its investment strategy. Bittensor (TAO) and NEAR Protocol (NEAR) now form the fund’s largest positions, followed by Render (RENDER), Filecoin (FIL), and The Graph (GRT).

Grayscale’s crypto funds do not generate income but offer investors a passive way to gain sector-specific exposure to crypto assets. They are adjusted periodically to stay aligned with market dynamics, and operational costs are covered by selling small amounts of the portfolio assets. These changes come as Grayscale also continues to push for broader market access. Its highly anticipated Grayscale Digital Large Cap (GDLC) ETF, which includes BTC, ETH, XRP, SOL, and ADA, remains under review by the U.S. Securities and Exchange Commission (SEC). The listing has been delayed indefinitely as the agency reviews crypto ETF regulations and frameworks.

Grayscale’s Q2 updates reflect a dynamic market environment where strategic rebalancing helps investors stay aligned with innovation trends across DeFi, smart contracts, and AI-powered blockchain solutions. The updates reflect shifting market dynamics and strategic positioning, while the firm’s Decentralized AI Fund saw internal weight adjustments without adding or removing tokens. The addition of Ondo Finance to the DeFi Fund is another strategic move. Ondo Finance is a yield-optimization protocol designed to maximize returns for investors. By including Ondo in its portfolio, Grayscale is positioning itself to capitalize on the growing trend of yield farming and liquidity provision in the DeFi space. This addition is expected to enhance the fund's performance by providing access to higher yields and more efficient capital allocation. The removal of Polkadot from the Smart Contract Fund signals a strategic pivot. Polkadot, known for its interoperability and scalability, has been a key player in the blockchain ecosystem. However, Grayscale's decision to replace it with Hedera indicates a focus on different technological attributes that may better align with the firm's investment goals. The rebalancing of Grayscale's portfolio for the second quarter of 2025 is a clear indication of the firm's proactive approach to managing its investments. By adding Ondo Finance and replacing Polkadot with Hedera, Grayscale is demonstrating its ability to adapt to the evolving landscape of digital assets. These changes reflect the firm's commitment to staying at the forefront of technological innovation and delivering value to its investors.