TLDR
- 21Shares has integrated Chainlink’s Proof of Reserve (PoR) system for its Ethereum ETF (CETH).
- The integration aims to increase transparency by allowing real-time verification of ETH reserves.
- This move follows 21Shares’ earlier integration of Chainlink PoR for its Bitcoin ETF.
- The integration comes shortly after the launch of the first spot Ethereum ETFs in the US.
- Chainlink’s PoR system pulls reserve data directly from Coinbase, where the ETF’s assets are held.
21Shares, a leading crypto investment firm, has taken a significant step to enhance transparency in the emerging world of cryptocurrency exchange-traded funds (ETFs).
The company recently announced the integration of Chainlink’s Proof of Reserve (PoR) system for its 21Shares Core Ethereum ETF, which trades under the ticker CETH.
This integration allows investors to verify the Ethereum reserves backing the ETF in real-time. The PoR system pulls data directly from Coinbase, where the fund’s assets are held. This means anyone can check the current amount of Ethereum held by the fund, as well as its reserve history.
The move comes at a crucial time for the crypto industry. Just last week, the first spot Ethereum ETFs were approved in the United States. These funds allow investors to gain exposure to Ethereum without directly owning the cryptocurrency. 21Shares’ CETH was one of nine such ETFs to start trading.
Exciting news! 21Shares has integrated @Chainlink Proof of Reserve (PoR) on Ethereum to increase the transparency of the 21Shares Core Ethereum ETF’s (CETH) reserves.
This integration of Chainlink's Proof of Reserve ensures investors have real-time visibility into the Ethereum… pic.twitter.com/OivK5OASPS
— 21Shares US (@21shares_us) July 29, 2024
Ophelia Snyder, co-founder and president of 21Shares, explained the company’s decision: “Chainlink Proof of Reserve has already been helping to enhance the transparency of our spot Bitcoin ETP since its initial launch, making the decision to leverage Chainlink’s industry-standard reserves verification service for our spot Ethereum ETP, CETH, a no-brainer.”
The integration of Chainlink’s PoR system isn’t new for 21Shares. In February, the company announced a similar integration for its Bitcoin ETF, which trades as ARKB. That fund has grown to manage over $3 billion in assets since its January launch.
21Shares chose Chainlink for this task because of its strong track record. Chainlink has helped secure over $12 trillion in value for various blockchain markets. The company sees this integration as a way to build trust with investors who might be wary of crypto-based financial products.
Johann Eid, chief business officer of Chainlink Labs, highlighted the importance of this development: “21Shares is playing an important role in supporting the adoption of digital assets, and the Chainlink platform is helping financial institutions realize the vision of seamless tokenization on a global scale.”
The launch of Ethereum ETFs is seen as a big step for crypto adoption. Snyder commented, “US approval of a spot Ethereum ETF serves as further evidence of crypto’s global momentum and adoption, bringing us one step closer to our mission to bridge the gap between traditional finance and decentralized finance.”
However, the initial reception of Ethereum ETFs has been mixed. While eight of the new funds saw over $1 billion in net inflows, Grayscale’s ETHE experienced $1.5 billion in outflows. This suggests that investors are still adjusting to these new investment options.
The integration of Chainlink’s PoR system comes as the crypto industry faces increased scrutiny and demand for accountability. By making reserve data easily accessible, 21Shares aims to build confidence among investors and set new standards in digital asset transparency and security.
Chainlink creator Sergey Nazarov sees this as part of a larger trend. He recently said,
“Accelerating the adoption of digital assets/smart contracts in TradFi is just the start. Once the world’s largest asset managers and banks are on-chain, the next step is connecting them to the DeFi protocols already powered by Chainlink.”
