Item 8.01 Other Events.
On October 4, 2022, Grayscale Investments, LLC, the manager (the “Manager”) of Grayscale Digital Large Cap Fund LLC (the “Fund”), completed its quarterly review of the Fund’s portfolio and initiated the process of rebalancing the Fund in accordance with the fund construction criteria, as described in the Fund’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on September 1, 2022. In accordance with the fund construction criteria, the digital assets held by the Fund (the “Fund Components”) consist of the digital assets (the “Index Components”) included in the CoinDesk Large Cap Select Index (the “DLCS”), subject to the Manager’s discretion to exclude an Index Component under certain circumstances. The DLCS is rebalanced quarterly beginning 14 days before the second business day of each January, April, July and October. On October 4, 2022, CoinDesk Indices, Inc. (in this capacity, the “Index Provider”) completed the quarterly rebalancing of the DLCS and determined that Bitcoin (“BTC”), Ethereum (“ETH”), Cardano (“ADA”), Solana (“SOL”), Polygon (“MATIC”) and Avalanche (“AVAX”) met the inclusion criteria of the DLCS Index. Accordingly, the Manager adjusted the Fund’s portfolio by selling the existing Fund Components in proportion to their respective weightings. As a result of the rebalancing, MATIC has been added to the Fund. No tokens were removed from the Fund. As of October 5, 2022, following the rebalancing, the Fund Components consisted of 65.32% BTC, 28.03% ETH, 2.49% ADA, 2.04% SOL, 1.26% MATIC, and 0.86% AVAX, and each of the Fund’s shares represented 0.0004 BTC, 0.0025 ETH, 0.7083 ADA, 0.0073 SOL, 0.1815 MATIC, and 0.0061 AVAX. Additional information regarding the Fund’s quarterly rebalancing is available in the Fund’s periodic reports filed with the Securities and Exchange Commission on Forms 10-K and 10-Q. A copy of the press release announcing the Fund’s quarterly rebalancing for the quarter ended September 30, 2022 is attached to this Current Report as Exhibit 99.1.
The Fund values each Fund Component it holds for operational purposes by reference to a “Digital Asset Reference Rate.” The Digital Asset Reference Rate for each Fund Component at any time is the Indicative Price for such Fund Component as of 4:00 p.m., New York time, on the most recent business day. The “Indicative Price” is a volume weighted average price in U.S. dollars of a digital asset for the immediately preceding 60-minute period derived from data collected from Digital Asset Exchanges trading such Fund Component (each, a “Constituent Exchange”) selected by CoinDesk Indices, Inc. (in this capacity, the “Reference Rate Provider”).
The Constituent Exchanges included in the Indicative Price for each respective Fund Component as of September 30, 2022 were as follows:
•BTC: Coinbase Pro, Kraken, and LMAX Digital
•ETH: Coinbase Pro, Kraken, and LMAX Digital
•ADA: Binance.US, Coinbase Pro, and Kraken
•SOL: Coinbase Pro, FTX.US, and Kraken
•AVAX: Binance.US, Coinbase Pro, and FTX.US
Effective October 4, 2022, the Reference Rate Provider removed Kraken as a Constituent Exchange used to calculate the Indicative Price for BTC and added Binance.US as part of its scheduled quarterly review. In addition, the Reference Rate Provider removed LMAX Digital as a Constituent Exchange used to calculate the Indicative Price for ETH and added FTX.US as part of its scheduled quarterly review. The Constituent Exchanges included in the Indicative Price for MATIC as of October 4, 2022 were Binance.US, Coinbase Pro, and Kraken.
