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Highlights
- The Swiss company, Valour, has launched an ETP that will track the performance of the cryptocurrency Solana.
- Solana is a highly functional open-source system that offers decentralised finance (DeFi) solutions.
- The Solana ETP means investors will now gain exposure to SOL through their bank or broker, which makes digital assets more accessible via mainstream channels.
Swiss company Valour’s Solana ETP (exchange-traded product) is set to launch on the Nordic Growth Market on September 16, 2021. The ETP will track the performance of Solana – the seventh largest cryptocurrency by market capitalisation. The Solana ETP will have a total expense ratio (TER) of 1.9 per cent.
What is ETP?
ETPs offer an opportunity for investors to invest in crypto in a regulated and pre-packaged way.
This is appealing to investors who are unsure about the security surrounding cryptocurrency. The crypto ETPs are physically backed, meaning the settlement is in the underlying asset as opposed to the cash equivalent.
Previously ETPs have included digital currencies like Bitcoin, Ethereum and Litecoin. The move to create a Solana ETP underscores the phenomenal performance of Solana so far this year.
What is Solana?
Solana was launched in March, 2020. It’s headquartered in Geneva, Switzerland. Its platform is a highly functional open-source system which offers decentralised finance (DeFi) solutions.
Solana was developed by engineer, Anatoly Yakovenko, who created a unique protocol known as proof-of-history (POH), an innovation that differs to other existing protocols – proof-of-work (POW) and proof-of-stake (POS).
The POH consensus means greater scalability, which, in turn, improves Solana’s usability. Users of the blockchain can access over 400 projects, which range from decentralised finance (DeFi) to non fungible token (NFT) projects.
The prominent feature Solana is known for, however, is its transaction processing speed. Its hybrid protocol means significantly shorter validation times for both transaction and smart contract execution. Solana boasts of a block time of just 400 milliseconds.
Its popularity is also due to its low transaction costs which, on average, costs US$0.00025 per transaction.
Since August, Solana’s price has skyrocketed, going from US$35.81 on August 1, 2021 to US$155.43 where it sits on September 15, 2021. This marks a rise of over 400 per cent in around six weeks.
What Does the Solana ETP Mean for Investors?
The Solana ETP means investors will now be able to gain exposure to SOL - Solana’s native token - through their bank or broker, making digital assets more accessible via mainstream channels.
This is good news for cryptocurrency supporters, in general, as it helps further legitimise the industry, pushing it further mainstream.
The move from Valour follows the launch of the first-ever Solana ETP, which was formed by 21Shares in June and listed on the SIX Swiss Exchange.
Solana being sold as an ETP can only mean positive news for the soaring digital currency as it continues with a spectacular 2021.
