Better transparency with proof-of-reserves
To provide real-time transparency to investors, CoinShares has partnered with The Network Firm and its LedgerLens solution.
What is proof of reserves?
Proof of reserves is an attestation service via The Network Firm LedgerLens solution. This blockchain-enabled solution allows investors to independently verify the crypto asset backing through viewable and downloadable attest reports that are generated daily.
How does it work?
This application leverages blockchain technology to independently verify the amount of crypto physically backing the ETP matches the Issuer's liabilities. This unique application allows CoinShares to advance the industry by adding another layer of transparency to its ETP product suite.
For CoinShares ETPs, the procedures detailed herein and the accountant’s findings are intended to demonstrate that, at the time the procedures were performed, the Issuer held in custody and controlled digital assets equal to the Coin Entitlement¹ of outstanding Securities. In short, the procedures are intended to demonstrate that the Securities in issue are adequately backed by the underlying digital assets held by the Issuer.
CoinShares XBT Provider Tracker ETPs use a synthetic replication method to give investors exposure to Bitcoin and Ethereum without requiring direct ownership of the assets. Each ETP represents an obligation to deliver the performance of the relevant digital currency, minus applicable fees, and these obligations are fully collateralized. Collateral is maintained in the form of a mix of custodied digital assets and synthetic positions, ensuring that the value of issued and outstanding ETPs is securely backed.
CoinShares XBT Physical ETPs are backed one-to-one with the underlying digital assets. For every Security issued, an equivalent amount of the asset is held in custody with institutional-grade partners, ensuring that investors’ holdings are fully supported. Where applicable, assets that operate under proof-of-stake mechanisms are staked securely through custodian partners’ infrastructure, with rewards passed on to investors. In short, each ETP is directly tied to the digital assets it represents.
