Grayscale Investments commits to funding Ethereum Classic development for another two years

Asset manager Grayscale Investments announced it would continue to financially support development initiatives on Ethereum Classic for at least the next two years. Since 2017, the Digital Currency Group subsidiary has donated one-third of the management fees (3% of AUM) from its Grayscale Ethereum Classic Trust to the ETC Cooperative, the non-profit that oversees the growth and development of the Ethereum Classic protocol. According to CoinDesk, these donations now total $1.1 million.

Why it matters:

• CoinDesk also points out that Grayscale controls around 14% of the total ETC supply (worth ~$80 million) to back its ethereum classic investment vehicle. With its sizable ETC holdings, it makes sense for Grayscale to continue to protect its investment, especially considering sustainable funding for open-source development is hard to come by.
• Ethereum Classic still trails its sister chain, Ethereum, in essentially every user metric, and ETC development teams need more funding to avoid falling further behind. In the short term, these funds will help fuel the work on the network’s upcoming upgrades, the most notable which, the Aztlan hard fork, aims to increase compatibility with Ethereum. The hypothesis behind this strategy is improving cross-chain compatibility will lower the cost to transition from Ethereum to Ethereum Classic, which boasts a more well-defined, yet less-flexible monetary policy.