- CoinShares has announced the debut of the world’s first physically-backed crypto exchange traded products (ETPs) meant to reward investors for staking.
- CoinShares’ Staked ETPs, according to their website, are designed to allow the Issuer to share staking rewards with investors by lowering the management fee and raising the ETP’s Coin Entitlement each day as staking awards accumulate.
- This is the sixth ETP to be launched on the CoinShares Physical ETP platform, and it comes after the company revealed its Q3 financial results following its March 2021 NASDAQ First North Growth Market listing.
CoinShares, Europe’s largest digital asset investment firm with over US$4 billion in assets under management (AUM), today announced the launch of the world’s first physically-backed crypto exchange-traded products (ETPs) designed to share staking rewards with investors.
An ETP is a financial instrument that tracks the performance of an underlying security, index, or financial instrument. An ETF, like other exchange, traded instruments like Exchange Traded Notes (ETNs) or Exchange Traded Commodities, is a type of ETP (ETCs).
CoinShares Physical Staked Tezos and CoinShares Physical Staked Polkadot will be registered on the Xetra exchange in Germany. The new ETPs use CoinShares’ technology platform to give investors easy access to proof-of-stake protocols and the rewards associated with participating in their security.
Xetra is a trading technology platform run by the Deutsche Börse Group, which handles more than 90% of all stock trading on all German exchanges. The DAX 30 index is still listed on Xetra, one of the first global electronic trade systems.
CoinShares’ objective is to increase access to the digital asset ecosystem while also functioning as a reliable partner for their clients.
Townsend Lansing, Head of Product at CoinShares, had this to say about the announcement today: “Proof-of-stake protocols require investors to use their holdings to validate the network and its transactions. The validator also earns the protocol’s digital currency.”
Proof-of-stake is a way of safeguarding a cryptocurrency network and attaining distributed consensus by requiring users to demonstrate ownership of a specific quantity of coin. It differs from proof-of-work systems, which validate electronic transactions using challenging hashing techniques.
This means that investors can pool their resources to form enormous pools that share profits.
“We are proud to launch the first physically-backed crypto ETPs with a unique mechanism that enables us to share staking rewards with investors in a transparent way.”
CoinShares Physical Staked Tezos
The world’s first physically-backed Exchange Traded Product (ETP) provides exposure to the Tezos network’s native asset tez, with a lower management fee of 0% per year and additional staking (or ‘baking’) rewards of 3% per year*.
Tezos and other proof-of-stake blockchains work differently than Bitcoin and other proof-of-work blockchains. To put it another way, adding new blocks to the blockchain necessitates existing cryptocurrency holders ‘staking’ their coins.
The Issuer can share staking rewards with investors in two ways with CoinShares’ Staked ETPs; the Issuer can lower the management fee and increase the ETP’s Coin Entitlement each day as staking awards accumulate.
CoinShares Physical Staked Polkadot
CoinShares Physical Staked Polkadot (CDOT) is an exchange-traded asset with a physical backing (ETP). The value of securities is derived from DOT, held safely by Komainu, an institutional-grade licenced digital asset custodian.
The management fee has been reduced to 0% every year with a 5% p.a. staking reward.
Staked coins do not leave the secure custodian where they are housed, and ETPs are always 100% physically backed, according to CoinShares.
ETP investors should be able to partake in the entire development potential of these protocols, according to Frank Spiteri, CoinShares’ Chief Revenue Officer. CoinShares has a history of firsts and innovation, having introduced Europe’s first Bitcoin ETP in 2015, and we’re delighted to push the industry forward once more with the launch of these staked ETPs. They anticipate that this will become the optimal structure for ETPs tracking digital assets on proof-of-stake blockchains in the future.
CoinShares CEO Jean-Marie Mognetti established the fact that “Our past successes were closely correlated with the quality and the innovative essence of our technology platforms and infrastructures, always contributing to elevating trust, transparency and innovation as core principles of our Exchange Traded Product offerings. One more time, we are back with a unique offering, breaking the established principles of this industry by leveraging CoinShares’ technology stack and expertise.”
This is the sixth ETP to be established on the CoinShares Physical ETP platform, and it comes after CoinShares released its Q3 financial results following its March 2021 listing on Nasdaq’s First North Growth Market.