A phrase about as old as crypto itself.
Earlier in the week, we were treated to some exciting news (albeit it has been expected for some time now). CoinShares announced
the rollout of their physically-backed crypto exchange traded products (ETPs). Among the rollout, were Tezos and Polkadot ETPs.
If you’ve been keeping up with this development, plans were announced
a while back on our TezTalks stream with Danny Masters. Danny also serves on the Tezos Foundation board.
Nevertheless, this development is significant for a few reasons not just in the light of Tezos - but the broader Proof-of-Stake space as a whole.
Firstly, these ETPs are the first institutional products of their kind. Using their own physical staked tez and DOT, investors can participate in the rewards accrued from securing these networks in the form of baking/validator operation without having to maintain hardware or infrastructure.
Since ETPs are listed on a national stock exchange and can be traded via traditional equity markets, these products are perfect for dissuading against the long on-ramp process within crypto networks for institutions.
Furthermore, since the tez/DOT is physically backed in these ETPs, CoinShares will have to hold the underlying assets instead of using derivatives as a benchmark.
By providing these ETPs along with the staking rewards they accrue to institutions and investors, it’s a great way for them to dip their toes into the water that is Proof-of-Stake without fully jumping in.
This can potentially lead to more exploration of protocols like Tezos. Overall, it should be seen as nothing short of a positive development for the Tezos ecosystem and that of Proof-of-Stake.
Townsend Lansing, Head of Product at CoinShares commented in a PR
on the news.
“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”.