21Shares Teams Up with Chainlink to Secure Ethereum ETF Reserves
Chainlink’s Proof of Reserve has been implemented by 21Shares U.S. LLC, an ally of 21Shares AG, on the Ethereum mainnet to enhance transparency regarding the Ethereum reserves that support the 21Shares Core Ethereum ETF (CETH), affirming CETH’s ownership of Ether (ETH), the second-largest cryptocurrency by market cap.
Overview of the Proof of Reserve
The selection of Chainlink by 21Shares was due to its widely recognized decentralized platform for computation. The integration of Chainlink’s Proof of Reserve provides complete visibility into the ETH reserves backing CETH. This allows investors to access real-time reserve data and historical information through an off-chain feed sourcing data directly from Coinbase. This ensures transparent and secure collateralization of CETH, amounting to a total value of over $12 trillion facilitated in on-chain markets by the Chainlink platform.
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Johann Eid, the CEO of Chainlink Labs, described this partnership as crucial for enhancing transparency in the industry and driving the adoption of digital assets. He further noted that this integration will facilitate seamless worldwide tokenization for financial institutions.
This development follows the approval of the first spot Ethereum ETFs in the United States, which commenced trading on July 23. 21Shares previously incorporated Chainlink Proof of Reserve into their spot Bitcoin ETF (ARKB) in January 2024 and currently manages $3.2 billion. The successful implementation of BTC reserves led to the pursuit of additional methods in their Ether ETF, fostering investor confidence and transparency.
Advantages of Proof of Reserves (PoR)
Chainlink Proof of Reserve offers numerous advantages, including automated on-chain verification, decentralization, and transparency. The incorporation of automated on-chain verification into a reference contract with real-time data facilitates the creation of automated logic by investors and protocols based on changes in CETH’s collateralization status.
The decentralized nature of Chainlink Proof of Reserve ensures updates without central points, providing reliable information about CETH’s collateralization on the chain. This transparency enables independent verification of asset collateralization through near real-time monitoring of Proof of Reserve feeds.
Final Thought
In light of these technological advancements, BlackRock has cautioned about the rising number of investment-related scams, particularly those involving cryptocurrency investment websites and social media platforms such as WhatsApp or Telegram. The company emphasized that neither BlackRock nor its executives solicit investments or payments via social media and urged the public to remain vigilant and avoid suspicious activities.
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