Earlier this week, cryptocurrency asset manager Grayscale Investments announced that it had added Cardano (ADA) to its digital large cap fund (GDLC) — marking the crypto project as the fund’s third largest component.

Cardano is a decentralized proof-of-stake smart contract platform headed by Charles Hoskinson, one of the co-founders of Ethereum. Despite having no working product to date, ADA — the native token of the Cardano network — is the 5th largest cryptocurrency by market capitalization, according to CoinMarketCap.

According to Grayscale, the majority of GDLC is invested in Bitcoin and Ethereum, with the two largest cryptocurrencies accounting for 67% and 25% of the fund’s $349 million AUM. The latest addition of Cardano means that ADA will now make up 4.26% of the fund.

Behind Cardano, GDLC is also invested in Bitcoin Cash (BCH), Litecoin (LTC) and Chainlink (LINK). These three cryptocurrencies make up 1.03%, 0.99% and 0.86%, respectively. 

Grayscale stated that it would sell existing fund components in proportion to their respective fund weightings and use the cash proceeds to purchase Cardano. 

“We are excited to welcome Cardano to our Digital Large Cap Fund’s portfolio as we work to ensure that our diversified Fund can safely hold assets that collectively comprise 70% of the entire digital asset market, said Edward McGee, VP of Finance at Grayscale. 

“Digital currencies represent a unique opportunity for investors to diversify their portfolios, and at grayscale, we are proud to provide our investors with access to leading digital currencies through regulated, familiar product offerings.  

Earlier this year, Grayscale dropped cryptocurrency Ripple (XRP) from GDLC due to regulatory concerns. This was due to the U.S. Securities and Exchange Commission (SEC) filing a lawsuit against Ripple, accusing the platform of selling unregistered securities. On April 6, XRP was replaced by an up-and-coming cryptocurrency project Chainlink.

Related Reading | Grayscale Looks to Bolster Investment Offerings with 13 More Cryptos, Including Polygon, Solana, and ICP

According to data from FlagTicker, Grayscale Digital Large Cap’s premium to net asset value (NAV) sits at -0.60% — which is comparatively lower than Grayscale Bitcoin Trust’s -8.84%.

GDLC’s private placements remain closed at this time, meaning that the fund is not accepting new investors.

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