Newly minted Pando Asset has debuted its first ETP in Switzerland providing directly backed exposure to a basket of cryptocurrencies underpinning leading smart contract platforms.
Junfei Ren, Partner at Pando Asset.
The Pando Asset Crypto 6 ETP (PNDS SW) has been listed on SIX Swiss Exchange in US dollars.
Smart contracts are automated programs that are stored on a blockchain and run when predetermined conditions are met.
Their function is to execute agreements in such a way that all participants can be immediately certain of the outcome.
Additional smart contract benefits include anonymity, authenticity, and frictionless transactions, as well as time and cost savings resulting from the absence of intermediaries.
Methodology
The ETP is linked to the Vinter Pando Crypto Basket 6 Index which was developed by European digital assets index provider Vinter in partnership with Pando.
The index references the performance of the six largest and most liquid smart contract crypto assets based on 90-day average market capitalizations.
Each crypto asset is weighted proportional to the square root of its market capitalization, a weighting methodology that aims to deliver a diversified portfolio where the two largest assets are not overpowering the basket.
Currently, the index’s allocation is to Bitcoin (39.6%), Ethereum (27.3%), Binance Coin (11.9%), Solana (8.0%), Cardano (7.3%), and Polkadot (5.9%).
The ETP is designed to offer institutional investors easy, diversified access to these leading smart contract crypto assets through a liquid, regulated vehicle without the technical challenges of setting up private keys or crypto wallets.
It uses full direct, so-called ‘physical’ replication with each ETP share being 100% collateralized by a corresponding investment in the underlying crypto assets which are stored using an institutional-grade, ‘cold storage’ custody solution provided by Coinbase.
Pando also employs additional safety features such as multiple signature authorization, whitelisting addresses, and audit trails.
Junfei Ren, Partner at Pando Asset, said: “The company has the mission to let investors be able to participate in crypto assets without worrying the risk of missing a private key or password, or facing any loss from hackers or systematic security issues.”
The ETP comes with an expense ratio of 2.00%.
PNDS is the second multi-crypto ETP to focus on smart contract platforms following the May 2022 launch of the VanEck Smart Contract Leaders ETN (VSMA GY) on Deutsche Börse Xetra. VSMA, which comes with an expense ratio of 1.50%, weights its constituents by market value while capping the weight of any single asset at 30%. Notably, the ETP does not consider Bitcoin to be a qualifying smart contract platform (probably because Bitcoin wasn’t originally designed with smart contract functionality but rather to be a decentralized currency).