Grayscale Crypto Sectors highlight aspects that have been in the public eye since 2009 when Bitcoin first appeared. Numerous additional cryptocurrencies have emerged, with some achieving success and others failing in their attempts to replicate Bitcoin’s exact mechanism. To cut a long tale short, Grayscale Crypto Sectors intends to defeat the conventional financial system without defeating its original intent.
The inclusion of an aggregator drives the Web2 value chain, while the Web3 value chain eliminates their role altogether.
Grayscale Crypto Sectors can be understood on three grounds: their use case, how they work, and their investable exposure. At a micro level, the understanding draws inspiration from the way it has been built and the benefits that it fetches for the end-user. Use cases include the primary purpose of the crypto asset, its underlying mechanics, plus the technical features that make up the second part, and the distinct exposure or risk exposure that reflects how much an investor should worry about their funds.
Protocols of Crypto Sectors include currencies, financials, smart contract platforms, consumer and culture, utilities and services. Currencies serve as a medium of exchange and a store of value. Smart Contract platforms are the infrastructures that enable accessibility and autonomy for developers. Financials deal with lending, borrowing, and trading assets, except no intermediaries are involved with crypto. Finally, consumer and culture and utilities & services pertain to different categories of services plus products and tools for the applications.
Cryptocurrencies have remained true to the conditions that a currency must meet. It has acted as a medium of exchange, enabled holders to store their values, and has been a unit of account.
The primary distinction between cryptocurrencies and conventional currencies is the Central Bank, which serves as the intermediary. It regulates the issuance of traditional currencies. Similarly, supply and inflation depend on the Central Bank’s ultimate decisions. The same cannot be said about cryptocurrencies, as they operate in a trustless manner. That refers to users relying on the underlying code instead of a centralized authority.
Smart contract platforms like Solana, Ethereum, and Polkadot provide the world with a permissionless and open-sourced infrastructure, helping developers build their respective applications. Their objective is to process and execute transactions on dApps or other blockchains.
DeFi resembles the traditional financial system. It offers the functions of lending, borrowing, and trading assets. Since there are no intermediaries, transactions are economical and faster in comparison. The idea behind having DeFi is to transfer values from one user to another and facilitate liquidity. Some platforms in the segment are Aave, Curve, and Uniswap.
A variety of categories sets consumers and culture. Crypto sectors include media, gaming, fashion, NFTs, etc. The idea is to offer consumers a share in brands and in-game items. These are ideally owned by individuals and fuel engagement in the virtual world.
Utilities and services are based on enterprise-level services and real-world assets. The price movement is in real-time, strengthening crypto applications’ utility by connecting them to the real world.