Digital asset ETP issuer Valour, a subsidiary of NEO-listed DeFi Technologies, is set to introduce two new ETPs in Europe.
Tommy Franssson, CEO of Valour.
The Valour Terra ETP and Valour Avalanche ETP will provide exposure to LUNA and AVAX, the native tokens underpinning the Terra and Avalanche blockchains, respectively.
The ETPs will initially be listed on the Nordic Growth Market with cross-listings on other European exchanges expected shortly thereafter.
The ETPs will offer investors easy access to the LUNA and AVAX tokens through liquid, regulated vehicles without the technical challenges of setting up private keys or crypto wallets.
For each ETP share that is bought and sold, Valour will purchase or sell the equivalent amount of the underlying digital assets, meaning that the ETPs will be fully backed at all times.
Tommy Franssson, CEO of Valour, said: “We are now launching the very in-demand Terra and Avalanche products. These are the first of their kind in the Nordics and they follow our earlier successes with Uniswap, Solana, Cardano, Polkadot, Ethereum and Bitcoin. With these products, we further strengthen our position as a leading provider of digital asset ETPs in Europe.”
Terra
Terra was founded in 2018 by Daniel Shin, co-founder of South Korean e-commerce platform TicketMonster, in partnership with Do Kwon, a former Microsoft and Apple software engineer.
The Terra blockchain, which is capable of processing a transaction in just two seconds and up to 10,000 transactions per second, underpins an extensive decentralized finance (DeFi) ecosystem based on the issuance of algorithmically managed stablecoins.
Stablecoins are cryptocurrencies that are pegged to reserve assets such as major fiat currencies. They are commonly used in DeFi applications as they enable investors to generate yield on their crypto assets while alleviating the potential adverse effects of market volatility.
Terra’s aim is to disrupt traditional finance by satisfying all of an individual’s banking needs in one place. The blockchain’s ‘Anchor’ protocol is considered its most significant, enabling borrowing and lending solutions by generating yields on investors’ stablecoins.
However, Terra’s applications go much further. Dozens of DeFi applications are also running on Terra with some of the most notable being CHAI, a payments app currently used by more than 25 million South Koreans; Ozone, an insurance service; Mirror, which allows investors to gain synthetic exposure to traditional asset classes such as US equities; and Pylon, which provides principal-protected investment opportunities.
LUNA serves two primary functions on the Terra blockchain. It is used to verify transactions, using the less energy-intensive proof-of-stake model, while it also regulates Terra’s stablecoin pegs through an arbitrage mechanism. This latter function can, however, add a potential layer of volatility if systemic problems arise related to the stablecoins.
LUNA was one of the best-performing cryptocurrencies in 2021, adding more than 13,800% to its value last year. With a current market capitalization of $20.1 billion, it is the ninth-largest cryptocurrency globally.
Avalanche
Avalanche is an open-source platform for DeFi applications and enterprise blockchain deployments, making it a direct rival to Ethereum, the most popular blockchain for the deployment of smart contracts.
The Avalanche network comprises multiple blockchains and employs a proof-of-stake consensus mechanism that achieves a high throughput of up to 6,500 transactions per second without compromising scalability.
Each chain in the Avalanche architecture represents its own virtual machine and allows for case-specific functionality.
The network’s name reflects its consensus protocol which consists of four mechanisms (Slush, Snowflake, Snowball, and Avalanche) that build upon each other and become more secure in the process.
With a total market capitalization of $20.0bn, AVAX is currently ranked as the tenth-largest cryptocurrency globally.