Swiss-based crypto exchange-traded products (ETP) provider, 21Shares, has recently introduced a new product allowing traditional investors to gain exposure to Lido DAO – a key player in the liquid-staking ecosystem. This expansion allows the general public in 22 European Union countries, including France, Germany, and Portugal, to access this cutting-edge investment opportunity. The ETP currently represents $100,000 in assets under management (AUM) within the 21Shares’ total AUM valued at over $1.1 billion.
The introduction of the 21Shares Lido DAO ETP has generated a wave of excitement within the crypto community. This non-interest bearing, open-ended security provides exposure to the growing market. Liquid staking is gaining momentum, enabling users to maintain liquidity despite locking their cryptocurrency to secure the blockchain network and earn rewards.
Lido dominates the liquid staking market and boasts over $13 billion ETH staked, capturing a staggering 76% market share of liquid staking derivatives on Ethereum. The data from blockchain analytics firm Nansen provides solid backing for the potential success of the recently launched ETP.
However, the enthusiasm surrounding the new product is not without a healthy dose of skepticism. 21Shares has categorized the Lido DAO ETP as “high risk” in several aspects. Factors contributing to the elevated risk level include market risk due to lack of capital protection, regulatory risk, secondary market risk, risk of occurrence of an extraordinary event, and the risk of a quick change in the value of a crypto asset that could plummet to zero.
21Shares warned potential investors, stating, “We have classified this product as class 7 out of 7, which is the highest risk class.” The company further elaborates that this rating indicates the potential for very high losses from future performance and poor market conditions, which could adversely affect the fund’s ability to pay out.
In conclusion, while the 21Shares Lido DAO ETP presents an exciting opportunity for traditional investors to gain exposure to the burgeoning liquid-staking ecosystem, it’s essential to recognize the substantial risks involved. It is always wise for investors to carefully weigh the advantages and potential pitfalls before diving into such high-risk investment products, even if they are backed by trusted companies like 21Shares.
Source: Coindesk
