TLDR
21Shares has integrated Chainlink’s Proof of Reserve system for its Ethereum ETF (CETH).
The integration aims to increase transparency of the ETH reserves backing the ETF.
Chainlink’s system provides real-time reserve data and history, pulled directly from Coinbase.
This follows 21Shares’ earlier integration of Chainlink PoR for its Bitcoin ETF.
The move comes shortly after the launch of the first spot Ethereum ETFs in the US.
21Shares, a major crypto investment product provider, has taken a step to boost transparency for its Ethereum exchange-traded fund (ETF). The company announced it has integrated Chainlink’s Proof of Reserve (PoR) system for its 21Shares Core Ethereum ETF, which trades under the ticker CETH.
This integration allows investors to see real-time data about the Ethereum reserves that back the ETF. The PoR system pulls data directly from Coinbase, where the ETF’s assets are held. This means anyone can check the current amount of Ethereum held by the fund, as well as its reserve history.
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
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.
Ophelia Snyder, co-founder and president of 21Shares, explained the 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.”
This move comes at an important time for crypto ETFs. 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.
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.”
Johann Eid, chief business officer of Chainlink Labs, also 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 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.
These moves towards greater transparency come as the crypto industry faces increased scrutiny and demand for accountability. By making reserve data easily accessible, 21Shares aims to build confidence among investors who might be wary of crypto-based financial products.
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.
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