Among the fleet of Chainlink oracle services that have enabled over $14 trillion in onchain transaction value is Proof of Reserve (PoR), which provides real-time updates for reserves backing digital assets with superior transparency and reliability compared to annual statutory audits, interim audits, and monthly proof of reserves.
PoR establishes the industry standard for tokenized real-world assets, decentralized exchanges, and crypto ETFs – investment funds that track the performance of an underlying asset so investors may access the value of an asset without directly owning it.
As the world’s largest crypto ETF issuer with seven billion dollars in assets under management, 21Shares uses PoR to enhance the transparency of Bitcoin reserves backing the ARK 21Shares Bitcoin ETF (ARKB) and Ethereum reserves backing the 21Shares Core Ethereum ETF (CETH).
In a new video, Head of Strategy and Business Development at 21Shares Eliézer Ndinga explained why crypto ETFs powered by PoR are poised to revolutionize the global financial system.
“Our mission is to give easy access to crypto assets for traditional finance investors as well as newer investors,” he said. “We know that blockchain technology is going to reinvent capital markets for a very long time.”
Back in January, U.S. regulators approved spot Bitcoin ETFs in what Chainlink co-founder Sergey Nazarov described as a watershed moment for crypto. PoR boosts investor confidence in crypto ETFs by making their underlying reserves and reserve history publicly available in real time.
The ARKB and CETH PoR feeds pull reserve data directly from Coinbase, which directly accesses accounts or vaults holding reserve assets, calculates the total value of reserves, and reports the data onchain via Chainlink oracles.
Transparent reserve data is an essential building block of Nazarov’s long-term vision for digital assets that serve as an immutable golden record which helps prevent systemic failures in the global financial system.
“Chainlink Proof of Reserve, in a nutshell, enables transparency for the end investors,” Ndinga said. “For the first time in history, we can have real-time financial statements of crypto assets compared to any other asset classes, where you have to wait for the end of the quarter to actually get the financial results of a publicly listed company.”