21Shares launches proof-of-stake crypto basket ETP

Jan 18th, 2023 | By | Category: Alternatives / Multi-Asset

Digital assets investment specialist 21Shares has unveiled the world’s first crypto basket ETP providing directly backed exposure to the largest proof-of-stake (PoS) cryptocurrencies while fully staking its underlying tokens.

21Shares targets staking income with new crypto basket ETP

Binance Coin, the token used for trading and paying fees on the world’s largest cryptocurrency exchange, currently represents more than half of the ETP’s exposure.

The 21Shares Staking Basket Index ETP (STAKE SW) has been listed on BX Swiss with an expense ratio of 2.50%.

Staking is a way of earning rewards for holding certain crypto assets that work on a PoS consensus mechanism. PoS mechanisms put their underlying cryptocurrency to work in verifying and securing transactions on the blockchain. Investors who choose to take part in this process ‘stake’ their cryptocurrency holdings and earn rewards for doing so.

STAKE delivers two performance streams – the income from staking, which is independent of general market returns, and the potential for price appreciation of the underlying crypto assets.

The ETP is linked to the 21Shares Staking Basket Index which was developed in collaboration with Swedish index provider Vinter. The index includes the largest PoS crypto assets that satisfy certain requirements related to market depth and exchange availability. Rebalancing occurs on a semi-annual basis in March and September to reflect market shifts.

Binance Coin, the token used for trading and paying fees on Binance, the world’s largest cryptocurrency exchange, currently represents more than half (58.5%) of the index weight with the remaining exposure dedicated to Cardano (16.0%), Solana (10.6%), Polkadot (8.6%), Cosmos (5.0%), and Tezos (1.3%).

The ETP utilizes full direct, so-called ‘physical’ replication with each ETP share being 100% collateralized by a corresponding investment in the underlying crypto assets. Physical (in a digital sense) tokens are stored using institutional-grade custody solutions that harness a variety of safety measures including cold storage, multiple private keys, whitelisting, and audit trails.

Staked crypto assets do not move from the secure custodian where they are stored, and the ETP remains 100% physically backed at all times.

Commenting on the ETP’s launch, Arthur Krause, Director of ETP Product at 21.co, parent company of 21Shares, said: “Staking is a long-standing feature of the blockchain ecosystem that allows crypto holders to earn rewards in exchange for locking up their assets. Our research has shown that investors are interested in diversified, crypto-native return streams – especially amid crypto winter. In particular, we’ve heard demand for a reliable and safe way to access staking, one of the most attractive potential return streams available in the crypto ecosystem. The 21Shares Staking Basket Index ETP does just that and will be an attractive addition to many portfolios.”

Jacob Lindberg, CEO of Vinter, added: “We are pleased to be launching the world’s first crypto staking index ETP with 21Shares which is another milestone in our great partnership. This product addresses demands from retail and institutional investors globally, and we look forward to continuing our work with 21Shares as they seek to launch more innovative investment products that build bridges into the crypto world.”

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