21Shares Integrates Chainlink Proof of Reserve (PoR) on Ethereum to Enhance the Transparency of their Core Ethereum ETF (CETH)

One of the world's largest issuers of crypto exchange traded funds (ETPs), 21Shares, has integrated Chainlink's Proof of Reserve (PoR) on Ethereum

Crypto exchange traded fund (ETF) provider 21Shares has integrated Chainlink’s Proof of Reserve (PoR) on Ethereum to enhance the transparency of their Core Ethereum ETF (CETH). This move aims to instill greater trust among investors in the firm.

21Shares Integrating Chainlink

According to a press release by 21Shares US LLC, the integration will see the firm’s flagship ETF have its Ethereum reserve proven through Chainlink’s Proof of Reserve. This will provide assurance to investors that CETH is indeed backed by physical Ethereum holdings.

The data on 21Shares’ ETH reserve is made available through a Chainlink feed that pulls this information directly from Coinbase custody. President of ETFStore, Nate Geraci, shared a screenshot of the CETH reserve, highlighting that this provides transparency into the ether backing ETF.

The press release also outlines 21Shares’ rationale for choosing Chainlink’s Proof of Reserve. The firm chose Chainlink as its preferred decentralized computing platform due to its proven track record of enabling over 12 trillion in total value for on-chain markets.

This integration will ensure full transparency while enabling security, maintaining asset integrity, and building trust among investors. Chainlink’s Proof of Reserve feed eliminates the need for a middle point to provide external data to blockchains, keeping the system fully decentralized and ensuring that there is no failure in updating data.

The automated onchain verification will keep the onchain data up-to-date. As per the CETH reserve data, 21Shares currently has 2,800 ETH in their reserve.

Chainlink for Bitcoin ETF

notably, 21Shares is already utilizing Chainlink PoR for their ARK Bitcoin ETF (ARKB). This integration was carried out in February 2024. ARKB is a leading Bitcoin spot exchange traded product that currently holds $3.2 billion in assets.

High Volatility Risks

In a twitter post, 21Shares US went into further detail regarding this integration. They clarified that the Fund is not a fund registered under the Investment Company Act of 1940.

They highlighted that the fund is not akin to other exchange traded products or ETFs. The fund is not suitable for all investors, as trusts that focus on a single asset typically experience high volatility and carry the risk of losing entire funds. Their twitter post includes a link to the 139-page ETH ETF Prospectus for 21Shares CETF.

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