Expect Goldman to say one thing and do the other. A case in point is the influential US bank’s new ‘Innovate DeFi and Blockchain Equity ETF’ fund, which, despite its name, contains no exposure to any actual decentralized finance (DeFi) tokens.
“The Index is designed to deliver exposure to companies that are aligned with two key themes, the implementation of Blockchain Technology and the Digitalization of Finance,” the filing with the US Securities and Exchange Commission (SEC) reads. It adds, “the eligible universe of stocks is common equity securities of companies located across developed and emerging markets worldwide.”
The fund tracks the ‘Solactive Blockchain Technology Index,’ a German exchange-traded fund offering made of companies working on cryptographic or blockchain solutions.
At the top of this list is Swedish phone maker Nokia, which launched a blockchain-powered data marketplace earlier this year, Facebook, whose ‘Diem’ stablecoin remains an ambitious payments project, Google parent Alphabet, which is working on blockchain-based cloud services, and Accenture, which has long been associated with the Corda enterprise blockchain consortium.
Other companies in the index include Fujitsu, Mastercard, Visa, PayPal, Siemens, Sony, and Alibaba. They have all—at some point in the past two years—either begun pilot projects consisting of blockchain technology, or even integrated crypto payments as part of a broader strategy.
Missing the point of DeFi?
While Goldman’s blockchain fund is a bold step, the arguably real DeFi exists on chains like Ethereum, Solana, Binance Smart Chain, and others.
It’s where peer-to-peer loans, lending, trading, seed funding, and niche innovations like self-paying loans have launched and thrived—providing the world with a newer form of financial services, one that relies on smart contacts and algorithms ahead of prestige and bank referrals.
>market the ETF as a DeFi index
>only include centralized tech giants
How is this not a complete scam @GoldmanSachs?
None of these companies have anything to do with the DeFi ecosystem being built on public blockchains
— ChainLinkGod.eth 2.0 (@ChainLinkGod) July 27, 2021
The lack of any such applications has understandably irked some in crypto circles. “Goldman Sachs’s “DeFi” Fund contains only legacy companies and has 0 crypto-native companies. They’re trying to deceive the public into thinking we already have decentralized finance,” noted Charlie Shrem, founder of the Bitcoin Foundation
Goldman Sachs’s “DeFi” Fund contains only legacy companies and has 0 crypto-native companies.
They’re trying to deceive the public into thinking we already have decentralized finance.
Fix the money, fix the world
— Charlie Shrem (@CharlieShrem) July 27, 2021
Meanwhile, Goldman, on its part, still expresses caution about the new DeFi fund. “Blockchain technologies are new and developing and the risks associated with such technologies may not fully emerge until they are widely used,” it said, adding:
“Currently, there are relatively few companies for which digital assets represent an attributable and significant revenue stream. Therefore, the performance of the companies included in the Index may not be a reflection of their connection to blockchain technologies, but may be based on other business operations.”
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