21Shares, one of the largest cryptocurrency exchange-traded product (ETP) issuers, is launching a staking ETP based on cryptocurrency Toncoin (TON).
The new Toncoin Staking ETP is a 100% physically backed product that tracks the performance of TON while reinvesting staking yields into the ETP for enhanced performance.
The product will start trading on the Swiss SIX Exchange under the ticker TONN on March 27, the firm said in an announcement to Cointelegraph on Wednesday.
The new crypto investment product aims to provide investors with an opportunity to earn TON staking rewards without the need to set up and manage a staking node.
The TON Blockchain uses a proof-of-stake (PoS) model to achieve network consensus, allowing validators — or network security supporters — to earn rewards by staking.
According to the TON Foundation, users typically need at least 600,000 TON ($2.9 million) to qualify for staking, but users are allowed to join forces and pool their assets together.
With 21Shares, investors will be able to enjoy the benefits of staking Toncoin without the technical complexities associated with TON staking. Instead, they will have the convenience and liquidity of traditional financial markets, the announcement notes.
According to 21Shares co-founder and president Ophelia Snyder, TONN is the “first and only TON ETP” ever launched. Snyder told Cointelegraph that the firm opted to launch a staking ETP instead of a spot one 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 holds $25 million at launch, equivalent to roughly 5 million TON at the time of writing. The ETP’s net asset value debuts at $20.
21Shares mentioned that the TONN ETP provides a regulated and secure way for investors to tap into The Open Network, a blockchain network used by popular crypto-friendly messengers like Telegram.
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“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, started as “Telegram Open Network” in 2019 and was developed by Pavel Durov’s Telegram.
The company was forced to cut involvement in the blockchain project in May 2020 following a long-running legal battle with the United States Securities and Exchange Commission.
Despite dropping TON formally, Telegram continued actively participating in promoting the open-sourced TON technology and Toncoin.
TON is one of the few coins natively supported in the custodial cryptocurrency wallet on Telegram, known simply as “Wallet.”
In line with the ongoing rally on cryptocurrency markets, TON has posted significant growth recently, surging 134% over the past 30 days. At the time of writing, the coin is trading at $4.97, down about 4.5% over the past 24 hours, according to CoinGecko.
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