Europe’s largest digital asset investment firm, CoinShares has rolled out a physically-backed exchange-traded product (ETP) for the polkadot cryptocurrency.
The new ETP has been listed on Switzerland’s SIX Swiss Exchange in Zurich, and provides simple exposure to the Polkadot ecosystem and rewards for participating in their security. The offering is 100% physically backed by actual crypto assets and the staked coins will be stored in a secure custodian.
Proof-of-stake blockchains like Polkadot requires holders to stake their cryptocurrency to add new blocks, which then triggers additional yield by validating transactions on the relevant network.
Polkadot market capitalization is currently around $16.1 billion, , according to CoinMarketCap, putting its DOT token at the 13th place in the cryptocurrency rankings.
The latest launch follows the Germany’s main market, Börse Xetra giving CoinShares approval to list a pair of physical staked ETPs for Polkadot and Tezos. The product is also the latest in a series of ETP launches outside the US focused on assets beyond major coins such as bitcoin and ether.
CoinShares said the staked ETPs also allow the issuer to reduce the management fee as staking awards accrue. Last month, the company has already reduced the management fees from 1.5% to zero by adjusting the coin entitlement daily to share annualized staking awards of 5% for Polkadot.
A physically backed crypto ETP traditionally has a coin entitlement which refers to the number of digital assets the fund entitled to hold. As such, investors have the option to redeem ETP shares directly for the Polkadot’s native toke, DOT.
Townsend Lansing, Head of Product at CoinShares, commented, “The SIX Swiss Exchange was one of the first regulated exchanges in Europe to allow for the trading of digital asset ETPs, and Swiss investors continue to show strong interest in investing in digital assets via listed products. We are excited to list our innovative physical-backed staked Polkadot ETP in Switzerland and provide a wider audience with a means to further involve themselves in the cryptocurrency ecosystem.”
CoinShares ETPs aim to be the lowest cost product providing regulated access to crypto tokens, whilst benefiting from the institutional grade security and 100% physically backed features that match other ETC securities.
CoinShares, which has nearly $3.5 billion in assets under management (AUM), says its lineup of physical ETPs have been produced in response to strong demand from institutional investors to gain crypto exposure through regulated means.
