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CoinShares announces its physically-backed exchange-traded product (ETP)

CoinShares, a digital asset investment firm, has launched a new physically-backed exchange-traded product (ETP) that tracks the price of Cardano ($ADA). The ETP is intended to share the benefits of staking the cryptocurrency with investors. The CoinShares Physical Staked Cardano ETP (CSDA) is listed on the Deutsche Boerse with a total expense ratio of 1.5 percent, which is offset by the product’s staking incentives, according to ETF Stream. According to CoinShares’ website, the overall expense ratio has been cut to 0%, and investors may expect staking payouts of 3% per year. Each CSDA share is backed by one ADA token, with daily staking rewards.

Staking allows investors to participate in Cardano’s consensus mechanism and be rewarded for it, similar to how miners on Proof-of-Work (PoW) blockchains are compensated for their efforts. All staked coins stay in the custodian’s custody, and the ETP is 100 percent physically backed, according to CoinShares. Cardano presently has 69.5 percent of its circulating supply staked over 2,993 active pools, according to PoolTool data, implying that $18.3 billion in ADA is currently staked.

The percentage has dropped significantly from late last year, when it was well over 70%. After the launch of decentralised applications on Cardano, which increased demand for ADA, the percentage of circulating supply that was staked certainly fell. According to CryptoGlobe, the number of addresses holding ADA for the long term increased by 32.1 percent to 408,000 last month, which  increased by 10.9 percent in January and 5.78 percent in December, indicating that HODLers are continuing to accumulate the cryptocurrency.

According to CryptoCompare’s latest Asset Report, the number of addresses owning ADA increased 5.9% to a new all-time high in February, owing to an increase in long-term holders and a 13.4% increase in cruisers, who increased to 3.62 million addresses. The network’s total number of dealers fell by 25.2 percent to 770,000. Tezos ($XTZ) and Polkadot ($DOT) are two more physically-backed ETPs that CoinShares launched last month. CoinShares is best known for introducing Europe’s first Bitcoin ETP in 2015, and it has since expanded its offerings to include other crypto assets. These include ether ($ETH), Litecoin ($LTC), and XRP ($XRP) products.

Read more: CoinShares invests $26.5 million in FlowBank

Kunal Krishan
Kunal is an investment space writer who firmly believes investment is something which should not be a choice but a part of everyone's life.
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