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Digital asset investment manager CoinShares has launched a new crypto ETP providing direct exposure to ADA, the native token underpinning the Cardano blockchain.
ADA is currently ranked as the eighth-largest cryptocurrency globally.
The CoinShares Physical Staked Cardano ETP (CSDA GY) has been listed on Deutsche Börse Xetra in euros.
The ETP comes with zero management fees and allows investors to earn a portion of the return attributable to staking underlying ADA tokens.
Cardano, developed by Ethereum co-founder Charles Hoskinson, is a smart contract platform enabling developers to build decentralized applications. Unlike other leading smart contract platforms such as Ethereum, Cardano powers its transaction settlement using a proof-of-stake algorithm, a structure considered less risky in terms of the potential for miners to attack the network.
With a total market capitalization of $26.7 billion, ADA is currently ranked as the eighth-largest cryptocurrency globally.
The CoinShares Physical Staked Cardano ETP offers institutional investors easy access to ADA 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 ADA. Physical (in a digital sense) ADA 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 3% return per annum attributable to ‘staking’ income generated by the underlying ADA.
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.
The launch brings the total number of CoinShares’ directly backed crypto ETPs to seven. Four of the products, which invest in Bitcoin, Ethereum, Litecoin, and XRP, do not pursue staking returns. Other than the newly launched Cardano ETP, the remaining two products offer zero-fee, staked access to Polkadot and Tezos.
Townsend Lansing, Head of Product at CoinShares, said: “Following the successful launch of our staked Polkadot and Tezos ETPs on Xetra earlier this year, we are excited to add Cardano to our range of products. This is the first Cardano ETP in the world to feature transparent staking rewards for investors, and we look forward to launching more digital asset ETPs with best-in-class structures in the coming months.”
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