21Shares US LLC has announced the integration of Chainlink Proof of Reserve on the Ethereum mainnet. This strategic decision underpins the 21Shares Core Ethereum ETF (CETH), which is backed physically by Ether and aims to track the cryptocurrency’s performance accurately.
The partnership with Chainlink, a leader in decentralized services is an important first step towards improving the quality and safety of cryptocurrency backed ETFs.
Why Chainlink?
21Shares opted for Chainlink as it has a strong history of securing more than $12 trillion in on-chain transaction volume. Recognized for its reliability and security in decentralized computing, Chainlink provides a crucial layer of transparency essential for the burgeoning ETF market.
This integration means that real-time public accessibility to detailed reserve data is available for each CETH token at all times – to ensure complete backing by Ethereum- which strengthens investor confidence while also meeting regulatory requirements.
The added functionality of Chainlink Proof of Reserve offers unparalleled visibility into the real Ether capitalization behind CETH ETF. This system ensures that 21Shares holds the correct amount of underlying assets at all time in order to back each ETP with its equivalent regulated parents.
Chainlink provides all these functions by referencing an off chain reserves feed directly from Coinbase instead, which guarantees a current value and prevents tampering with the data or malicious theft of funds to interfere in Oracle price quotes – further guaranteeing asset integrity and building confidence for investors.
The improvement forms part of 21Shares’ wider plan to bring traditional financial securities together with the creative prospects that decentralized finance offers. 21Shares and Chainlink are well positioned to set new benchmarks in the ETF space, by enabling full transparency of a cryptographic audit trail while potentially unlocking wider institutional adoption into cryptocurrency products.
The launch on the ARK 21Shares Bitcoin ETF was preceded by Chainlink Proof of Reserve being successfully rolled out earlier in the year, allowing for its use with Ethereum-backed ETFs and demonstrating operational effectiveness.
A Milestone for Crypto ETFs
The launch of CETH along with eight other spot Ethereum ETFs last week represents a significant milestone in cryptocurrency acceptance and integration into mainstream finance.
Given the challenging conditions and market dynamics (Grayscale ETHE notes saw $1.5B in net outflows) these three new Ethereum ETF’s have continued to see significant inflows, further demonstrating how investor demand is strong for regulated and transparent cryptocurrency investment products.
Looking ahead, 21Shares continues to advocate for the broad acceptance of crypto assets, viewing the U.S. regulatory approval of a spot Ethereum ETF as a testament to the ongoing global momentum towards cryptocurrency.
The company’s commitment to leveraging advanced technologies like Chainlink’s Proof of Reserve is a testament to its mission to bridge the gap between traditional financial systems and the new age of digital finance.
