The latest update to Grayscale’s Q3 2025 Top 20 altcoins list marks a strategic pivot toward projects demonstrating tangible network growth and real-world utility. Avalanche (AVAX) and Morpho have been added, reflecting their rising prominence in blockchain adoption and decentralized finance (DeFi), while Lido DAO (LDO) and Optimism (OP) were removed due to shifting performance metrics and long-term viability concerns.
This revision underscores Grayscale’s evolving investment philosophy—favoring protocols with measurable on-chain activity, sustainable revenue models, and expanding ecosystems over those reliant on speculative momentum or centralized staking dominance.
AVAX Joins the Ranks on Strong Network Momentum
Avalanche has earned its place in Grayscale’s updated Top 20 list, driven by a surge in real-world usage and ecosystem development. The blockchain has seen consistent growth in stablecoin transactions, decentralized applications (dApps), and gaming integrations—key indicators of robust network health.
One of the most significant catalysts was the integration with MapleStory, a popular online game that leveraged Avalanche’s high-speed, low-cost infrastructure to power in-game economies. This partnership not only boosted transaction volume but also demonstrated AVAX’s capacity to support large-scale digital ecosystems beyond typical DeFi use cases.
Moreover, Avalanche has strengthened its enterprise appeal through collaboration with Filecoin, enabling secure storage of off-chain data such as KYC records and audit logs. This hybrid model—combining blockchain transparency with decentralized storage—aligns perfectly with institutional-grade requirements for compliance and data integrity.
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These advancements signal that Avalanche is transitioning from a speculative asset to a foundational layer for scalable, compliant Web3 solutions—a shift that clearly resonated with Grayscale’s evaluation criteria.
Morpho Emerges as a DeFi Powerhouse
Joining AVAX on the list is Morpho, an innovative DeFi lending protocol redefining capital efficiency in decentralized finance. With over $4 billion in total value locked (TVL), Morpho has distinguished itself by optimizing existing lending pools from platforms like Aave and Compound.
Its latest upgrade introduced Morpho Blue, a permissioned lending pool designed to bridge traditional finance (TradFi) with blockchain-based credit markets. By enabling institutions to lend and borrow under regulated conditions while still benefiting from on-chain transparency, Morpho is carving out a unique niche in the evolving financial landscape.
Grayscale’s inclusion of Morpho highlights a growing preference for protocols that offer real yield, risk-managed exposure, and interoperability with legacy systems. As global financial institutions explore tokenized assets and programmable money, Morpho’s hybrid approach positions it at the forefront of this transformation.
Why LDO and OP Were Removed
Despite their established reputations, Lido DAO (LDO) and Optimism (OP) have been dropped from the list, signaling shifts in Grayscale’s risk and growth assessment framework.
Lido DAO: Regulatory Uncertainty Clouds Staking Leadership
Lido remains a dominant force in Ethereum staking, with more than 35 million ETH secured across its platform—a figure that continues to grow monthly. However, increasing regulatory scrutiny in the U.S. around liquid staking tokens (LSTs) has cast doubt on their classification as non-security assets.
With the SEC intensifying its focus on staking services and potential centralization risks, Grayscale may have viewed Lido’s model as increasingly vulnerable to compliance challenges. While decentralization efforts are ongoing, the perception of concentration among node operators remains a concern for institutional investors seeking regulatory clarity.
Optimism: Strong Adoption, Weak Tokenomics
Optimism continues to be widely adopted as an Ethereum Layer 2 scaling solution, particularly within the growing OP Stack ecosystem. It recently partnered with Earned Network to deliver automated yield strategies across interconnected chains—a move that enhances composability and user experience.
However, the OP token has struggled to demonstrate strong revenue generation or sustainable token utility. Unlike other Layer 2 projects exploring MEV capture, fee-sharing mechanisms, or governance incentives tied to protocol earnings, OP’s economic model remains underdeveloped.
Additionally, Ethereum’s shifting roadmap—particularly its embrace of multiple rollup types rather than a single dominant one—has introduced uncertainty about Optimism’s long-term strategic advantage. For a firm like Grayscale, which prioritizes durable value propositions, these factors likely contributed to OP’s removal.
XRP and ADA Still Absent—What Does It Mean?
Notably, XRP and Cardano (ADA) remain excluded from the list despite recent developments.
XRP has shown resilience following the partial resolution of its legal battle with the SEC, currently trading at $2.18. Yet Grayscale appears unconvinced by its network activity levels relative to market cap. While Ripple continues expanding its payment corridor partnerships, on-chain transaction volume and smart contract adoption remain limited compared to newer ecosystems.
Similarly, Cardano maintains a loyal community and academic rigor in protocol design, but lags in developer engagement and dApp diversity. With fewer than 100 active DeFi projects and minimal TVL compared to top-tier chains, ADA fails to meet Grayscale’s threshold for ecosystem vitality.
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Their continued absence reinforces a key takeaway: market sentiment and brand recognition alone are no longer enough. Grayscale is prioritizing measurable adoption, scalable infrastructure, and sustainable token economics.
A Strategic Shift Toward Data-Driven Infrastructure
Beyond individual asset picks, Grayscale’s launch of the Space and Time Trust reveals a broader strategic direction. This new investment vehicle gives accredited investors access to blockchain-verified data infrastructure—a nod to the rising importance of trusted, tamper-proof data in both finance and enterprise applications.
By backing technologies that ensure data integrity across systems, Grayscale is signaling confidence in the convergence of blockchain, AI, and enterprise IT. This aligns with AVAX and Morpho’s inclusion, both of which support verifiable computation and secure interoperability.
Frequently Asked Questions
Q: Why did Grayscale add Avalanche to its Q3 2025 list?
A: Avalanche was added due to strong growth in network activity, including increased stablecoin usage, gaming integrations like MapleStory, and enterprise data storage partnerships with Filecoin.
Q: What makes Morpho different from other DeFi lending platforms?
A: Morpho improves capital efficiency by optimizing existing lending pools from protocols like Aave and Compound. Its Morpho Blue product also enables regulated institutions to participate in on-chain lending.
Q: Why were Lido and Optimism removed?
A: Lido faces regulatory uncertainty around liquid staking tokens in the U.S., while Optimism’s OP token lacks strong revenue generation and long-term differentiation amid Ethereum’s evolving rollup strategy.
Q: Are XRP and Cardano likely to be added in future updates?
A: Only if they significantly improve on-chain activity, developer adoption, and real-world utility. Currently, they fall short of Grayscale’s standards for network growth.
Q: What is the significance of the Space and Time Trust?
A: It reflects Grayscale’s growing interest in blockchain-based data verification infrastructure—an emerging sector critical for AI, auditing, and institutional DeFi applications.
Q: How often does Grayscale update its Top 20 altcoins list?
A: Updates typically occur quarterly, based on performance metrics, ecosystem development, regulatory trends, and macroeconomic factors affecting digital asset viability.
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Grayscale’s latest move is more than a portfolio adjustment—it's a statement about the future of digital assets. As the line between traditional finance and blockchain blurs, only projects delivering real utility, measurable growth, and institutional readiness will secure a place in elite investment circles. The message is clear: innovation must be backed by action, not just ambition.