Grayscale's Decision Analysis Adds PYTH and FIL to the Managed Asset List

Introduction and Context In the context of the increasingly developing cryptocurrency market with decentralized data and storage solutions, Grayscale - a leading cryptocurrency fund management company - has made important decisions to add assets with strong growth potential to its investment portfolio. Two of the assets added to the watchlist/management list are Pyth Network and Filecoin. This decision is not random but carefully considered through evaluating qualitative criteria such as business collaboration, security, and real-world applicability as well as quantitative indicators such as trading volume, TTV/TVS, market capitalization, number of strategic partners, etc. Information from Grayscale's official announcements shows: PYTH was listed through the launch of Grayscale Pyth Trust, with the announcement on February 18, 2025 from GlobeNewswire1 and CoinDesk2. FIL was added to the roster through the portfolio restructuring of Grayscale Decentralized AI Fund on January 8, 2025 from GlobeNewswire3. These announcements have opened up new investment opportunities for investors, while affirming the position of Pyth and Filecoin in the cryptocurrency ecosystem, especially as the dependence of dApps and decentralized applications on oracle data and storage continues to grow. Quantitative Factors

1. Liquidity and Market Capitalization Factors According to the official document "Grayscale 485a" published on the SEC, Grayscale evaluates assets based on specific quantitative indices, including: Trading Volume: Assets are required to have a minimum average daily trading volume of 1 million USD for 90 days to ensure liquidity (SEC Filing4). Market capitalization: The minimum market capitalization requirement for assets on Grayscale's watchlist is 100 million USD (ChainCatcher5).

2. Special Index of Pyth Network Pyth Network - an advanced oracle network - is evaluated through strong quantitative metrics: Total Trading Volume (TTV) and Total Value Locked (TVS): TTV of Pyth reaches 34.846 billion USD, compared to Chainlink's approximately 31.679 billion USD (VanEck6). Pyth's TVS is currently 4.97 billion USD, up 187% from previous figures (SolanaFloor7). Although Pyth's TVS is still lower than Chainlink's (approximately 5.5 billion USD compared to 38.7 billion USD), this figure is evaluated alongside high diversity and accuracy (more than 210 times of other oracles - Pyth Blog8). The ratio is applied in DeFi Protocols: Pyth is used by about 25% to 60% of DeFi applications, showing an increasing level of dependence and popularity, especially in the Solana ecosystem, where some reports indicate that 95% of the value on Solana is secured by Pyth(Messari9, GlobeNewswire1).

3. Filecoin Index Filecoin, as a decentralized storage platform, is evaluated based on the following data: Storage Capacity and Utilization Performance: According to the 'State of Filecoin Q1 2024' report, Filecoin recorded nearly 1,900 PiB of stored data, a 9% increase compared to Q4/2023 and a threefold increase compared to Q1/2024 (Messari11). In other reports, despite a decrease in total storage capacity (for example, an 18% decrease in Q3/2024), the storage utilization rate has improved from 23% to over 26% (DePIN Scan12). Collaboration and Applications: Filecoin is not only included in the portfolio of potential decentralized storage assets, but also integrates new price data sources from Pyth through the Filecoin Virtual Machine (FVM). This helps enhance the operation of smart contracts in the Filecoin network (Finbold13). Notably, Filecoin has also collaborated with NASA and applied zk-SNARKs technology in its projects (HeLa14). Qualitative Factors

4. Relationship and Strategic Cooperation One of the important requirements from Grayscale is the quantity and quality of business partners. According to Grayscale's standards: Business Partner Requirement: The assets must be evaluated to have at least 20 existing business partners, or at least 3 major partners with influence ( such as: Sony, AWS, Nomura) (SEC Filing4). For Pyth Network: Pyth has accumulated notable strategic partner relationships such as The Open Network (TON), Sony Group, Nomura (through Laser Digital) along with a range of other partners from Messari Q3 202415 and Pyth Blog16. For Filecoin: Filecoin has attracted over 2,000 enterprise customers and integrated AI partnership programs along with storage solutions introduced in the Filecoin Foundation's 202417 report.

5. Security Factors and Legal Supervision Grayscale sets strict requirements for security and legal oversight to ensure that the invested assets have a robust risk control system: Smart Contract Security: Oracle networks' legal oversight: Oracle data systems, such as Pyth's, must adhere to continuous legal compliance monitoring mechanisms and mechanisms to verify the accuracy of the data (SEC Filing4).Criteria for Filecoin FVM: Filecoin has met the security requirements of FVM with strong encryption protocols and tight controls, according to (SEC Filing4) evaluation reports.

6. Diversity and Practical Application in the Ecosystem Pyth Network: As an oracle network providing accurate and powerful price data for the DeFi ecosystem, Pyth stands out with impressive figures on total trading volume and widespread customer base in decentralized applications (Messari9, CoinDesk2).Filecoin: In terms of decentralized storage, Filecoin not only provides massive storage capacity but also integrates new technological solutions to support AI-related applications, serving as the foundation for large-scale data storage and processing products (Messari11, DePIN Scan12). Requirements and Evaluation According to Grayscale's Framework The 'Grayscale 485a' document provides a clear framework for evaluating cryptocurrency assets, including the following requirements: Liquidity Requirement: Assets need to have a minimum average daily trading volume of 1 million USD. Minimum Market Capitalization: Assets must have a market capitalization ≥ 100 million USD. Security and Legal Supervision: Meet the security standards for transactions and data storage, conduct regular audits, and comply with KYC/AML requirements. Number of Business Partners: A minimum of 20 existing business partners is required, or at least 3 major strategic partners such as Sony, AWS...Oracle Data Valuation: Based on the ratio of TTV to TVS, data source utilization density and reliability with periodic review sequence. Risk Management: Applying risk control measures, continuous monitoring to ensure the safety of assets included in the portfolio. These requirements apply not only to oracle assets like Pyth but also to decentralized storage assets like Filecoin. For example, Filecoin is evaluated based on FVM security standards and the stability of storage contracts, while Pyth is evaluated based on transaction data and oracle data quality. Conclusion Grayscale's decision to include both Pyth Network and Filecoin in its watchlist/management list is based on a comprehensive evaluation system, combining quantitative factors such as trading volume, TTV/TVS, market capitalization, and liquidity requirements, as well as qualitative factors such as the quality of business partners, technology application capabilities, and compliance with strict legal and security standards. The fast-paced oracle trend and increasing demand for decentralized storage provide a solid foundation for these decisions. In the increasingly diverse and complex cryptocurrency ecosystem, applying such clear and transparent evaluation criteria helps Grayscale ensure that the selected assets not only have outstanding profit potential but also have a solid technological foundation, security, and supportive ecosystem. This explains why Grayscale has decided to add PYTH through Grayscale Pyth Trust and FIL through Grayscale® Decentralized AI Fund, providing investors with access to advanced solutions in the oracle and decentralized storage sector. Reference Materials Grayscale Investments® Launches Grayscale® Pyth Trust – GlobeNewswire1Grayscale Rolls Out Crypto Fund for Pyth – CoinDesk2Grayscale® Investments Announces Rebalancing – GlobeNewswire3SEC Filing4VanEck Deep Dive into Pyth Network6Messari Reports on Pyth and Filecoin18DePIN Scan on Filecoin12ChainCatcher on token market capitalization