21Shares, one of the leading cryptocurrency exchange-traded product (ETP) issuers, is releasing a staking ETP based on Toncoin (TON).The new Toncoin Staking ETP is a 100% physically backed product that follows TON’s performance while reinvesting staking dividends into the ETP for increased performance.The product will be listed on the Swiss SIX Exchange under the symbol TONN on March 27, according to a company announcement to Cointelegraph on Wednesday.
The new cryptocurrency investment product seeks to give investors the possibility to receive TON staking rewards without having to set up and run a staking node.The TON Blockchain achieves network consensus through a proof-of-stake (PoS) paradigm, which allows validators — or network security supporters — to receive rewards by staking.Users must normally have at least 600,000 TON ($2.9 million) to qualify for staking, according to the TON Foundation, however they are permitted to pool their assets.
With 21Shares, investors can get the benefits of Toncoin staking without the technical complications that come with it.Instead, they will benefit from the convenience and liquidity of traditional financial markets, according to the announcement.According to Ophelia Snyder, co-founder and president of 21Shares, TONN is the “first and only TON ETP” to be established.Snyder informed Cointelegraph that the firm decided to create a staking ETP rather than a spot ETP because staking ETPs are “superior to non-staking ETPs as the staking yield benefits ETP holders.” She added.
“A non-staking ETP would forego their income stream which is paid in TON, so for investors thinking in USD terms, their USD on yield cost goes up if TON goes up.”
According to the 21Shares website, the Toncoin Staking ETP has a launch capitalization of $25 million, which equates to around 5 million TON as of writing.The ETP’s net asset value is initially fixed at $20.
According to 21Shares, the TONN ETP offers investors a regulated and secure option to access The Open Network, a blockchain network used by popular crypto-friendly messaging apps such as Telegram.
“The Open Network aims to create a comprehensive ecosystem of user-facing services like the super-app WeChat, offering products like a decentralized storage, decentralized VPN, a payments solution and a native wallet to hold crypto directly within the messaging app,” 21Shares announcement noted.
The Open Network, or TON, began as the “Telegram Open Network” in 2019 and was created by Pavel Durov’s Telegram.Following a protracted legal struggle with the US Securities and Exchange Commission, the business was forced to withdraw from the blockchain project in May 2020.Despite officially discontinuing TON, Telegram continued to actively promote the open-source TON platform and Toncoin.
One of the few coins that Telegram’s “Wallet,” a custodial cryptocurrency wallet, supports natively is TON.TON has had notable growth recently, rising 134% over the last 30 days in line with the current surge in cryptocurrency markets.As of this writing, CoinGecko shows that the coin is trading at $4.97, down roughly 4.5% over the previous day.