Digital asset investment manager CoinShares has launched a new crypto ETP providing direct exposure to DOT, the token underpinning the Polkadot multi-chain.
DOT is currently the eleventh-largest cryptocurrency worldwide.
The CoinShares Physical Staked Polkadot ETP (CDOT SW) has been listed on SIX Swiss Exchange in US dollars (Ticker: CDOT SW) and Swiss francs (CDOTCHF SW) as well as on Deutsche Börse Xetra in US dollars (CDOU GY) and euros (CDOT GY).
The ETP comes with zero management fees and allows investors to earn a portion of the return attributable to staking underlying DOT tokens.
Polkadot is a blockchain of blockchains, allowing otherwise independent blockchains to communicate with each other, share security features, and transfer assets freely amongst themselves.
The DOT token serves two vital roles in the system – it is designed to participate in governance decisions, including tabling proposals and voting, and it is used as an electronic payment system.
With a current market capitalization of $18.3 billion, DOT is the eleventh-largest cryptocurrency globally.
The CoinShares Physical Staked Polkadot ETP offers institutional investors easy access to DOT through a liquid, regulated vehicle without the technical challenges of setting up private keys or crypto wallets.
The ETP uses full direct, so-called ‘physical’ replication with each ETP share being 100% collateralized by a corresponding investment in DOT. Physical (in a digital sense) DOT tokens are stored using institutional-grade custody solutions provided by Komainu.
The ETP comes with a management fee of 0.00%.
Investors in the ETP will also earn a 5% return per annum attributable to ‘staking’ income generated by the underlying DOT.
Staking is a way of earning rewards for holding certain cryptocurrencies that work on a proof-of-stake consensus mechanism. Proof-of-stake 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.
Staked coins do not move from the secure custodian where they are stored, and the ETP remains 100% physically backed at all times.
Townsend Lansing, Head of Product at CoinShares, said: “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 physically backed staked Polkadot ETP in Switzerland and provide a wider audience with a means to further involve themselves in the cryptocurrency ecosystem.”