21Shares has expanded its line-up of digital asset investment products with the world’s first ETP providing directly backed exposure to Toncoin, the native token of TON blockchain.
Toncoin is currently the 12th-largest crypto asset globally by market cap.
The 21Shares Toncoin Staking ETP (TONN SE) has been listed on SIX Swiss Exchange in US dollars.
TON distinguishes itself as a cutting-edge layer-1 blockchain that is theoretically capable of processing millions of transactions per second without compromising on efficiency. It provides a scalable, multi-blockchain framework aimed at facilitating the development and execution of decentralized applications (dApps) and smart contracts. Initially conceptualized by the renowned messaging service Telegram, TON stood for Telegram Open Network until regulatory challenges altered its course.
In 2019, the US Securities and Exchange Commission (SEC) filed a lawsuit against Telegram for violating federal securities laws during TON’s $1.7 billion initial coin offering (ICO) in 2018. In response to these challenges, Telegram distanced itself from the initiative in 2020, leaving the project to be advanced by developers not affiliated with Telegram, hence redefining TON as The Open Network.
Despite being financially independent of Telegram, TON continues to be backed by Telegram CEO Pavel Durov as the network of choice for Web3 infrastructure development on the social media platform. This endorsement means TON is able to leverage Telegram’s extensive user base, which exceeds 900 million monthly active users as of March 2024, underscoring the network’s significant potential.
TON is proving instrumental in transforming Telegram into a ‘super-app’ by integrating a broad array of user-oriented services. These include gaming platforms, cryptocurrency wallets, decentralized VPNs, payment systems, and decentralized file storage solutions, contributing to a rich and expanding ecosystem.
Toncoin, meanwhile, is used to power network operations and all transactions on the TON platform. With a total market capitalization of $17.1 billion, Toncoin is currently the 12th largest crypto asset globally.
The 21Shares Toncoin Staking ETP offers institutional investors easy access to Toncoin through a liquid, regulated vehicle without the technical challenges of setting up private keys or crypto wallets.
It uses full direct, ‘physical’ replication with each ETP share being 100% collateralized by a corresponding investment in Toncoin which is stored using an institutional-grade cold-storage custody solution provided by Copper.
The ETP also earns a passive return attributable to ‘staking’ income generated by the underlying Toncoin.
Staking is a way of earning rewards for holding certain cryptocurrencies that work on a proof-of-stake consensus mechanism. Proof-of-stake mechanisms put their underlying cryptocurrency to work in verifying and securing transactions on the blockchain. Investors who choose to take part in this process ‘stake’ their cryptocurrency holdings and earn rewards for doing so.
Staked coins do not move from the secure custodian where they are stored, and the ETP remains 100% physically backed at all times.
The ETP comes with an expense ratio of 2.50%.
Ophelia Snyder, co-Founder and President of 21Shares, commented: “Our 21Shares Toncoin Staking ETP opens up a new horizon for investors, providing a hassle-free gateway to staking rewards within the blockchain ecosystem. We are dedicated to empowering investors with innovative products, reaffirming our commitment to driving the evolution of blockchain investment opportunities.”