21Shares launches world’s first crypto ETPs
Swiss crypto ETF issuer 21Shares has just launched the world’s first polygon, avalanche and algorand ETFs.
- 21Shares Polygon ETP (POLY)
- 21Shares Avalanche ETP (AVAX)
- 21Shares Algorand ETP (ALGO)
Polygon is a crypto that tries to work within the system to fix Ethereum’s transaction cost crisis. As Ethereum has gotten more popular, it has become increasingly expensive and unwieldy. As Ethereum’s proof-of-work system only allows so many transactions to be processed an hour, a priority queue forms based on who is willing to pay more.
Polygon aims to fix this by running what is in effect a sub-ledger (“side chain”) within Ethereum that uses a faster and more efficient proof-of-stake system. This, in turn, lowers costs.
Avalanche is a blockchain that’s described as an “Ethereum killer”. Like Ethereum, Avalanche aims to make every kind of asset – shares, property, bonds, commodities, etc. – trade on the blockchain and replace much modern financial services infrastructure in the process.
Avalanche aims to beat Ethereum by providing faster transaction speeds and lower costs, thanks to using proof-of-stake. (Much like Polygon.)
Algorand is very similar to Avalanche. Its another potential Ethereum killer that uses proof-of-stake. However it aims to be even faster than Avalanche and comes from a more academic background.
These launches take 21Shares total crypto ETPs to 20. The firm has close to $3B in assets under management – all crypto.
The funds charge 2.5%.
Bernie’s commentary – proof-of-work is doomed
Solana, Cardano, Avalanche, Algorand—there are a lot of coins out there aiming to kill Ethereum. The reason there are so many contenders in with a shot is that Ethereum, like Bitcoin, is based on proof-of-work mining.
Proof-of-work mining is sometimes described by crypto cheerleaders as something advanced or technologically impressive. They say it involves “miners performing advanced computations,” “miners trying to solve complex mathematical challenges”, etc. But there’s really nothing interesting or advanced going on.
All that happens is modern-age prospectors (“miners”) punch random numbers into the NSA’s little SHA-256 number scrambler until they get a result with heaps of zeroes. (You can have a go yourself here).
It was only a matter of time until someone called bluff on this. Thus we have a generation of new cryptos – like these three today – promising to replace PoW with proof-of-stake. (i.e. Where miners prove that they own the cryptocurrency whose blockchain they’re verifying). This transition promises not only to be more efficient but also to be more environmentally friendly.
I’m not an expert on these cryptos at all. But based on my research so far I’d like to know how, if at all, they’re different to or better than Solana. They strike me as very similar, I also need to speak to 21 Shares to find out how they identify which coins to put into ETFs as they do keep finding ones that I had never heard of, but do seem interesting.