Alongside, a cryptocurrency index platform backed by venture capital giant Andreessen Horowitz (a16z), has launched its V2, aiming to take a decentralized approach to crypto investments using blockchain technology.
The startup will allow crypto investors to gain exposure to a basket of the top 15 cryptocurrencies via a single token – AMKT – in a similar way as exchange-traded funds (ETFs) work in the traditional financial market, a report from The Block said.
With its V2 release, Alongside fully migrates the product onto the blockchain, decentralizing key components of its offering.
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— Alongside (@alongsidefi) November 2, 2023
In traditional finance, ETFs often involve multiple participants handling various aspects of the fund, each charging their own fees.
In contrast, Alongside’s V2 reduces centralization and leverages the blockchain to offer a more cost-effective, decentralized, and globally available index product.
According to The Block’s report, the company believes this release will appeal to crypto investors seeking a more decentralized approach to investing across a range of tokens.
The report added that Alongside’s approach differs from other on-chain crypto funds by decentralizing the custody of assets, keeping it fully on-chain.
In V1, the platform utilized a wrapped asset model with crypto exchange Coinbase as the custodian, but in V2 this has now been fully migrated onto the blockchain.
Decentralizing the fund’s methodology
While Alongside has achieved some decentralization in terms of custody, it’s still reportedly exploring ways to decentralize the methodology of the fund, including the rules that govern the composition of the fund.
Ultimately, this aspect is left to holder governance, executed via a multisig arrangement where Alongside does not have a majority vote.
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