Polkadot News Today: Grayscale's Q2 Rebalance: ONDO and HBAR Signal DeFi's Strategic Shift

Grayscale updated its cryptocurrency portfolios in Q2 2025, adding ONDO and Hedera (HBAR) to its DeFi and Smart Contract Funds while removing Polkadot (DOT), reflecting a strategic shift toward assets aligned with evolving market dynamics and index methodologies. The adjustments, effective July 3, 2025, involved proportional rebalancing of existing holdings to accommodate new inclusions and optimize exposure to high-utility protocols. These changes underscore Grayscale's commitment to maintaining diversified, cap-weighted portfolios that track benchmarks such as the CoinDesk DeFi Select Index and CoinDesk Smart Contract Platform Select Capped Index.

In the DeFi Fund, ONDO entered with an 18.22% weighting, replacing DOT. This move highlights ONDO's growing relevance in decentralized finance, as Uniswap (34.01%) and Aave (30.74%) retained dominant positions. Grayscale's quarterly rebalancing aims to mirror market capitalization shifts and ensure compliance with index rules. The DeFi Fund's structure, which does not generate income and periodically sells assets to cover operational costs, aligns with its objective to track the CoinDesk DeFi Select Index net of expenses. ONDO's inclusion reflects its perceived role in expanding decentralized finance infrastructure, a sector Grayscale continues to prioritize amid regulatory and technological advancements.

The Smart Contract Fund replaced DOT with HBAR, allocating 5.80% to the latter. This adjustment reflects HBAR's increasing adoption in smart contract development, particularly its appeal as a scalable platform with low transaction costs. Ethereum (30.22%) and Solana (29.87%) maintained leadership in the fund, while Cardano (18.57%) and Sui (8.78%) followed. The removal of DOT signals shifting confidence in HBAR's potential, as Grayscale prioritizes platforms demonstrating robust liquidity, custody solutions, and utility in decentralized applications.

The Decentralized AI Fund retained its top five holdings-Bittensor, NEAR Protocol, Render, Filecoin, and The Graph-without adding or removing assets in Q2 2025. Bittensor (29.10%) and NEAR (28.41%) led the portfolio, emphasizing their roles in decentralized AI infrastructure. Grayscale's methodology for evaluating the fund each quarter focuses on capturing innovation in AI-linked systems while managing regulatory risks. Like other funds, the AI Fund redistributes assets to cover costs, gradually reducing per-share value over time. The consistent presence of these five assets underscores their perceived resilience amid market volatility and their foundational role in AI-driven blockchain ecosystems.

Grayscale's rebalancing strategy emphasizes long-term alignment with index rules and market trends. For the DeFi Fund, ONDO's inclusion at 18.22% reflects its growing traction in decentralized finance, while HBAR's 5.80% weighting in the Smart Contract Fund highlights its platform-specific advantages. These moves align with broader industry shifts toward protocols with proven use cases, such as cross-chain interoperability (HBAR) and automated market-making (ONDO). By adjusting allocations quarterly, Grayscale aims to mitigate exposure to underperforming assets while capitalizing on emerging opportunities in DeFi and AI-driven infrastructure.

The AI Fund's stability in Q2 2025 contrasts with more dynamic rebalances in other funds. Its focus on Bittensor and NEAR reflects confidence in their roles as decentralized AI frameworks, despite broader market fluctuations. Grayscale's approach to the AI Fund balances innovation with risk management, as the sector remains subject to rapid technological changes and regulatory scrutiny. The absence of new additions in Q2 2025 suggests a cautious stance, prioritizing existing holdings that demonstrate robust ecosystem development and technical adoption.

Source: [1] Grayscale Adds ONDO and Drops DOT in Major Fund Rebalancing for Q2 2025 (https://coincentral.com/grayscale-adds-ondo-and-drops-dot-in-major-fund-rebalancing-for-q2-2025/)