Alongside, a cryptocurrency index platform backed by venture capital giant Andreessen Horowitz (a16z), has unveiled its V2 release, aiming to take a decentralized approach to crypto investments using blockchain technology.
This startup enables cryptocurrency investors to access a diversified portfolio of the top 15 cryptocurrencies through a single token known as AMKT. This approach mirrors how exchange-traded funds (ETFs) operate in traditional financial markets, as reported by The Block.
With the launch of V2, Alongside has transitioned its product entirely onto the blockchain, decentralizing key components of its offering.
In conventional finance, ETFs often involve multiple parties handling various aspects of the fund, each charging their own fees. However, Alongside’s approach in the crypto space aims to streamline this process and make it more accessible and efficient for investors.
In contrast, Alongside’s V2 release is designed to reduce centralization and utilize blockchain technology to offer a more cost-effective, decentralized, and globally accessible index product.
According to The Block’s report, the company believes that this new release will attract cryptocurrency investors who are looking for a more decentralized approach to investing across a variety of tokens.
The report further noted that Alongside’s approach sets it apart from other on-chain crypto funds by decentralizing the custody of assets and keeping it entirely on the blockchain. In the previous version, V1, the platform utilized a wrapped asset model with Coinbase as the custodian. However, in V2, this model has been fully migrated onto the blockchain, eliminating the need for a centralized custodian.
Decentralizing the fund’s methodology
While Alongside has made progress in terms of decentralizing custody, it is actively exploring ways to decentralize the fund’s methodology, including the rules that determine the composition of the fund.
Ultimately, this aspect is placed in the hands of holder governance, which is executed through a multisignature (multisig) arrangement where Alongside does not hold a majority vote. This approach empowers token holders to have a say in the rules and governance of the fund, contributing to a more decentralized and community-driven approach to managing the investment vehicle.
