Grayscale Digital Currency Asset Manager Introduces ZEN Investment Trust
Earlier today, Grayscale Investments, the world’s leading cryptocurrency asset management firm, officially launched the ZEN Investment Trust, increasing the company’s collection of digital currency investment funds to nine. Like its parent coin, Zcash, ZEN emphasizes on the privacy of its transactions. Moreover, ZEN is the native virtual currency of the Horizen ecosystems, a decentralized blockchain platform that allows users to control and monetize their online presence. Besides, the Horizen network also has other features such as a messaging platform, web browser and a privacy-enable file storage.
Notably, ZEN coin was introduced to the crypto space in May last year. Back then, the coin was known as ZenCash, a name that was changed to ZEN this summer. According to Coinmarketcap.com, ZEN has a market capitalization of $80 million, placing it at number 75 among the top-ranked crypto tokens. Reportedly, Grayscale invested in Horizen through the acquisition of $6.3 million worth of ZEN tokens. Similar to other crypto investment funds run by Grayscale, the Zen Investment Trust will exclusively hold a single digital currency and sell the trust’s shares to investors.
As mentioned earlier, Grayscale supports nine different virtual currencies, ZEN included. In April, the company added four new trusts for Bitcoin Cash, Ripple, Litecoin, and Ethereum. Prior to these, Grayscale has created investment trust for Bitcoin, Zcash and Ethereum Classic, as well as a diversified fund that provides exposure to the cryptocurrencies with the highest market capitalization value.
Typically, Grayscale products are only available to institutional and accredited investors in their first year of existence. After this seclusion period elapses, the projects become available to all categories of investors. This model has already proven successful with both the Ethereum Classic and Bitcoin Investment Trusts. However, the decision to launch a trust for ZEN came as a surprise to many, given that Grayscale has a past of dealing with popular and highly valuable blockchains.
The introduction of the Zen Investment Trust will certainly contribute enormously to the development of the larger Horizen ecosystem. The massive influx of funds from corporate investors will be channeled towards the actualization of the project’s goals. Speaking on this, the co-founder of Horizen Rob Viglione, Sid that the money will make the platform outstanding in the flooded crypto space.
Regarding the choice to invest in ZEN, Michael Sonnenshien, the managing director of Grayscale, aid that the move was influenced by both market demand and the desire to invest in a promising crypto token. In an interview with Forbes, Michael revealed that the company often finds it hard to balance between their choice of investment and the choice of their clients. In this case, Grayscale was convinced by certain aspects of the Horizen protocol, including a formidable leadership team and a reliable developer community, inalterable blockchain ledger, a cap on total supply of tokens and emphasis on developing apps that are applicable to real-world situations.
Additionally, Sonnenshien likened the qualms facing the Zen Investment Trust to the scenario during the inauguration of the Ethereum Classic investment Trust. In this regard, Michael said that Grayscale often adopts a contrarian view. At the time, Ethereum Classic was deteriorating considerably, but Grayscale noticed some remarkable functionalities in the coin’s protocol, subsequently launching a fund. Like Ethereum Classic, ZEN has several amazing attributes within its protocol.
Since ZEN is a cryptocurrency whose main selling point is privacy, Grayscale expects investors to leverage this feature to facilitate peer-to-peer crypto transfers, file sharing and web browsing. The digital currency sees the unique ‘zero knowledge proofs’ technology which confirms transactions without requiring the involved parties to provide their details. Concerning this, Sonnenshien noted that the current era is marred with high prevalence of privacy breaches, adding that investors might soon be forced to pay large fees to guarantee the privacy of data.
In June, the reputation of ZEN suffered after an infamous 51% attack on its network caused a massive influx of double spending transactions. Although many investors perceive this incident negatively, Rob Viglione, the president of Horizen, indicated that his team’s response further drove Grayscale to invest in their project. Rob disclosed that Horizen has developed solutions that prevent the recurrence of such an attack. Such improvements include the updating of the consensus mechanism and increasing of the overall hash rate such that once malicious user cannot compromise the network by renting hashing power.
Michael reiterated Rob’s comments, saying that such incidence are prevalent in the early stages of an upcoming blockchain protocol. He added that Grayscale is focused on the long-term goals of a project.