Europe’s largest digital asset investment firm, CoinShares has rolled out the world’s first physically-backed crypto exchange-traded products (ETPs).
The offering, which includes CoinShares Physical Staked Tezos and CoinShares Physical Staked Polkadot, is “100% physically” backed by actual crypto assets. The staked coins will be stored in a secure custodian.
The new ETPs will be listed on Germany’s main market, Börse Xetra, and provide simple exposure to the proof-of-stake protocols and the rewards for participating in their security.
CoinShares, which has nearly $3 billion in assets under management (AUM), has been trying to structure a product that looked, from an institutional point of view, as close as possible to a traditional ETF.
Townsend Lansing, Head of Product at CoinShares, commented: “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, which means investors can contribute their assets to create large pools that share in those rewards. 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.”
Jean-Marie Mognetti, CoinShares CEO, concluded: “Our past successes were closely correlated with the quality and the innovative essence of our technology platforms and infrastructures, always contributing to elevate 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.”
Tezos ETP builds on a significant year of growth
CoinShares ETP also aims to be the lowest cost product providing regulated access to Tezos’ network token, whilst benefiting from the high quality, institutional grade security and custody, and 100% physically backed features that match other ETC securities.
The company says it has been produced in response to strong demand from institutional investors to gain exposure to the performance of open-source protocol Tezos (XTZ), which is backed by a global community of validators, researchers and developers.
Tezos is a highly-scalable platform that supports smart contract functionality and the development of decentralised applications (Dapps). It uses a variant of the proof-of-stake protocol which offers token holders the opportunity to delegate their assets to a validator and earn staking rewards.
Tezos also applies a governance model that automatically evolves and upgrades itself to ensure stability. Among blockchain projects, Tezos’s consensus mechanism is touted to be one of the most energy-efficient and technically sound platforms.
Physically-backed, the XETRA listing brings Tezos product within particularly easy reach of investors in Germany, which now boasts some of the most crypto friendly tax laws in mainland Europe. Trading Tezos through an ETP structure removes the technical challenges associated with cryptocurrency such as setting up a wallet or trading or unregulated exchanges.