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21Shares to Verify Ethereum ETF Reserves
21Shares U.S. LLC, an affiliate with 21Shares AG, has integrated Chainlink’s Proof of Reserve on the Ethereum mainnet to increase transparency about Ethereum reserves supporting the 21Shares Core Ethereum ETF (CETH), to affirm CETH as a true holder of Ether (ETH), the second-largest crypto by market cap.
Benefits of Chainlink Proof of Reserve
Chainlink got chosen by 21Shares because of its widely accepted decentralized platform for computation. The integration of Chainlink’s Proof of Reserve gives complete visibility to ETH reserves underlying CETH. This move comes after the approval of the first spot Ethereum ETFs in the United States, which began trading on July 23. Previously, in Jan 2024, 21Shares included Chainlink Proof of Reserve in their spot Bitcoin ETF (ARKB) and now has $3.2 billion under management.
How it Works
Chainlink Proof of Reserve offers several benefits including automated on-chain verification, decentralization, and transparency. By incorporating automated on-chain verification into a reference contract with up-to-date data allows for automated logic to be built by both investors and protocols based on changes in CETH’s collateralization state. The decentralized aspect behind Chainlink Proof Of Reserve enables updating without any central points thereby providing reliable information pertaining to CETH’s collateralization on the chain. Furthermore, this transparency allows anyone to monitor Proof of Reserve feeds in near real-time, thus allowing for independent verifications of asset collateralization.
Conclusion
In conclusion, the integration of Chainlink’s Proof of Reserve by 21Shares is a significant step towards increasing transparency and trust in the Ethereum ETF market. This move demonstrates 21Shares’ commitment to providing investors with reliable and accurate information about the assets they hold. As the crypto market continues to evolve, it is essential for institutions to prioritize transparency and trust, and Chainlink’s Proof of Reserve is an excellent example of how this can be achieved.
FAQs
Q: What is Chainlink’s Proof of Reserve?
A: Chainlink’s Proof of Reserve is a decentralized platform that provides real-time data on the collateralization of assets, allowing for automated on-chain verification and transparency.
Q: Why did 21Shares choose Chainlink’s Proof of Reserve?
A: 21Shares chose Chainlink’s Proof of Reserve due to its widely accepted decentralized platform for computation and its ability to provide complete visibility to ETH reserves underlying CETH.
Q: What are the benefits of Chainlink’s Proof of Reserve?
A: The benefits of Chainlink’s Proof of Reserve include automated on-chain verification, decentralization, and transparency, allowing for reliable information pertaining to CETH’s collateralization on the chain.
Q: How does Chainlink’s Proof of Reserve work?
A: Chainlink’s Proof of Reserve works by incorporating automated on-chain verification into a reference contract with up-to-date data, allowing for automated logic to be built by both investors and protocols based on changes in CETH’s collateralization state.
