Digital asset ETP specialist 21Shares has introduced the world’s first ETPs providing exposure to ADA and XLM, the native tokens underpinning the cardano and stellar blockchains respectively.
The Cardano ADA ETP (AADA SW; DADA GS) and Stellar XLM ETP (AXLM SW; XLME GS) have listed on SIX Swiss Exchange in US dollars and on Boerse Stuttgart in euros.
Cardano 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.
Cardano was developed by ethereum co-founder Charles Hoskinson and conducted its first settlements in 2017. Its native token, ADA, is currently ranked as the sixth-largest cryptocurrency globally with a total market cap exceeding $38 billion.
Stellar, meanwhile, is a purpose-built blockchain enabling the transfer of any assets and allowing developers to build low-cost financial services on the platform. Stellar was founded in 2014 by Jeb McCaleb, co-founder of Ripple, and has since processed more than 450 million operations made by over 4m users.
Its native token, lumen (XLM), a utility token for the payment of the platform’s transaction fees, is currently ranked as the seventeenth-largest cryptocurrency globally with a market cap of around $10.5bn.
The ETPs offer institutional investors easy access to ADA and XLM through liquid, regulated vehicles without the technical challenges of setting up private keys or crypto wallets.
The ETPs use full direct, so-called ‘physical’ replication with each share being 100% collateralized by a corresponding investment in ADA or XLM. Each unit of the cardano and stellar ETPs will be backed by approximately 16 ADA and 40 XLM, respectively, at launch.
Physical (in a digital sense) tokens are stored using institutional-grade custody solutions with Kingdom Trust and Coinbase providing custody services for ADA and XLM respectively.
Both ETPs come with management fees of 2.50%.
Earlier this year, 21Shares unveiled the 21Shares Polkadot ETP (PDOT GY), the world’s first ETP providing exposure to DOT, the token underpinning the innovative Polkadot multi-chain.
21Shares now offers a suite of nine single-asset crypto ETPs (bitcoin, ethereum, bitcoin cash, ripple, binance, tezos, polkadot, cardano, and stellar) as well as four multi-crypto index ETPs. The firm is reporting a surge of interest in its products with net inflows up by around 300% since Q1 2021.
Hany Rashwan, CEO of 21Shares, said: “As the leading crypto ETP issuer, Swiss and European institutional alike are asking us for simple and effective access to new blockchain technologies. These new ETPs deliver what they asked for, and we expect to add another two new crypto ETPs this quarter on top of new listing venues.”