TLDR
- 21Shares has integrated Chainlink’s Proof of Reserve system for its Ethereum ETF (CETH) to increase transparency.
- Chainlink’s Proof of Reserve allows real-time verification of the ETF’s Ethereum reserves.
- The integration comes shortly after the launch of spot Ethereum ETFs in the United States.
- 21Shares previously used Chainlink’s Proof of Reserve for its Bitcoin ETF (ARKB).
- Chainlink’s platform aims to connect traditional finance (TradFi) with decentralized finance (DeFi).
21Shares has integrated Chainlink’s Proof of Reserve (PoR) system for its Core Ethereum ETF (CETH). This integration, announced on July 29, 2024, allows investors to verify the Ethereum reserves backing the ETF in real-time.
The integration comes just a week after the launch of spot Ethereum ETFs in the United States. On July 23, 2024, ETFs from several major financial firms, including BlackRock, Fidelity, and 21Shares, hit the market.
This marks a significant milestone in the adoption of cryptocurrency-based financial products.
Chainlink’s Proof of Reserve system is designed to provide clear visibility into the underlying Ethereum reserves of CETH. This means investors can check the real-time reserve data and reserve history, ensuring that the ETF is backed by actual Ethereum holdings.
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
The data is made publicly available through an off-chain reserves feed that pulls information directly from Coinbase, maintaining both transparency and security.
21Shares chose Chainlink for this integration due to its proven track record in the crypto industry. Chainlink’s decentralized computing platform has enabled over $12 trillion in total value for on-chain markets, making it a trusted name in the field.
This isn’t the first time 21Shares has used Chainlink’s Proof of Reserve system. In February, the company integrated the same technology for its ARK 21Shares Bitcoin ETF (ARKB). Launched in January, ARKB now manages $3.2 billion in assets.
Ophelia Snyder, co-founder and president of 21Shares, emphasized the importance of this integration, stating,
“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 launch of spot Ethereum ETFs, including CETH, has seen significant market activity. While eight of the new funds saw over $1 billion in net inflows, Grayscale’s ETHE experienced $1.5 billion in net outflows.
Johann Eid, chief business officer of Chainlink Labs, sees this integration as a step towards broader adoption of digital assets. He stated,
“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.”
This integration aligns with the broader vision of Chainlink’s creator, Sergey Nazarov. He believes that the next big step in the adoption of digital assets and smart contracts by traditional finance (TradFi) is connecting them to decentralized finance (DeFi) protocols.
Nazarov envisions a future where there’s a single standard for transactions across multiple chains, bridging TradFi and DeFi in a global “Internet of Contracts.”
