Grayscale Launches Decentralized AI Fund Targeting Crypto Projects Focused on Data Control and Privacy

The world's largest crypto asset manager, Grayscale Investments, has announced the launch of a new fund focusing on decentralized artificial intelligence projects.

Grayscale, the world's largest digital currency asset manager, has announced the launch of a new fund focusing on decentralized artificial intelligence (AI) projects. The Grayscale Decentralized AI Fund will provide investors with exposure to protocols in the burgeoning AI sector within the crypto ecosystem.

As per the official announcement on Monday, the Fund will be rebalanced on a quarterly basis and will comprise three primary categories of protocols, including those facilitating decentralized AI infrastructure, protocols enabling decentralized AI applications, and decentralized AI marketplaces where both AI users and creators can interact.

The fund currently covers five projects, with Near (NEAR) having the most weightage at 32.99%. As of July 16, it is followed by Filecoin (FIL) at 30.59%, Render (RNDR) at 24.86%, Livepeer (LPT) at 8.64%, and Bittensor (TAO) at 2.92%.

The Fund is only available for eligible accredited investors so that the general public won't have access to it. According to Sharif-Askary:

“The rise of disruptive technologies has created compelling opportunities for Grayscale's investors since our 2013 inception, and we believe the launch of the Grayscale Decentralized AI Fund provides an opportunity to invest in Decentralized AI at its earliest phase.”

Now, let's take a deeper look into the AI crypto projects that will be part of Grayscale's Fund.

Bittensor (TAO)

An open-source protocol, Bittensor utilizes blockchain tech to create a decentralized network for machine learning (ML). To facilitate collaborative training of ML models, the project rewards TAO tokens.

The Bittensor network has two types of nodes: light nodes and full nodes. Light nodes contribute to the network by collecting data for ML models and uploading it to the Bittensor blockchain. Full nodes, on the other hand, download the data uploaded by light nodes, evaluate it, and train ML models. Their contributions are evaluated based on their value to the network. Those who enhance Bittensor's value receive increased stakes in TAO, and those who provide lesser value are gradually weakened before being removed.

With a market cap of $2.37 billion, TAO is among the top 50 crypto assets. As of writing, it is trading at $334.82, up more than 300% in the past year. While the token's price is up 988% from its all-time low (ATL) of $30.83 from May last year, it is currently down 55.7% from its all-time high (ATH) of $757.60, which was hit about five months ago.

Besides Grayscale, the project has also gained the interest of Digital Currency Group, Polychain, and Dao5, which have bought hundreds of millions of dollars worth of TAO. In an interview with Fortune, Bittensor founder Jacob Steeves said he began working on his project in 2015, but the rise of centralized tools out of Meta, Google, and OpenAI has now validated it.

The project basically aims to create a marketplace for AI where both AI users and creators can interact seamlessly and trustslessly in a transparent environment. Earlier this month, the Bittensor blockchain was temporarily halted after the team detected an attack on several user wallets. With at least one wallet drained of $8mln worth of the project's TAO tokens, its value subsequently dropped 15%, only to recover soon after as network members took steps to mitigate further mishaps.

The steps involved putting the chain on “safe mode” by “fully” halting transactions on-chain. A couple of months ago, the token also gained a listing on leading crypto exchange Binance as well as Crypto.com, which expanded its reach and opened it to large-scale trading.

Click here to learn all about buying Bittensor (TAO).

Filecoin (FIL)

A decentralized storage system, Filecoin records commitments made by the network's participants to tackle the issue of inefficient file storage and retrieval. The platform is based on the Interplanetary File System (IPFS), where all data is stored on a peer-to-peer blockchain.

The network can store personal files, videos, app data, company files, private data, public datasets, and more. Users can also sell data on the network. Filecoin can further be utilized to store large amounts of data for long periods of time.

The Filecoin ecosystem involves clients who place orders for storing or retrieving data, storage miners who store the client's data and are compensated for that, and retrieval miners who extract data at a client's request. The project raised $205 million in an ICO in 2017 but wasn't launched until late 2

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