21Shares Introduces Exchange-Traded Product for Liquid Staking Platform Lido DAO

While the product offers investors single asset exposure to the liquid staking leader, the Switzerland-based firm classified it as a class 7 risk, the highest level.

AccessTimeIconJun 12, 2023 at 3:06 p.m. UTC
Updated Jun 12, 2023 at 6:33 p.m. UTC
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21Shares, a provider of crypto exchange-traded products (ETP), introduced a way of gaining exposure to Lido DAO, offering traditional investors single asset exposure to the largest participant in the liquid-staking ecosystem.

According to the Switzerland-based company’s issue-specific summary, “21Shares Lido DAO ETP (LIDO) is a non-interest bearing, open-ended security. Each series of the product is linked to an index or specific underlying asset Lido DAO.”

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  • The products are offered to the general public in 22 European Union countries including France, Germany and Portugal and traded on several exchanges like SIX Swiss Exchange, BX Exchange and the Stuttgart Exchange. The ETP currently has $100,000 in assets under management (AUM), compared with 21Shares’ more than $1.1 billion total AUM.

    21Shares has marked this product as “high risk” in several categories: market risk due to lack of capital protection, regulatory risk, secondary market risk, risk of the occurrence of an extraordinary event and the risk of a quick change in the value of a crypto asset that could drop to zero.

    “We have classified this product as class 7 out of 7, which is the highest risk class,” 21Shares said in a document with the product’s key information. “This rates the potential losses from future performance at a very high level, and poor market conditions are very likely to impact the capacity of the fund to pay you.”

    It is not uncommon to see a risk factor of 7 assigned to similar products by virtue of crypto's higher price volatility, according to 21Shares communications manager Megan Enright. In an email to CoinDesk Enright said that "this risk indicator aligns with the risk classification of products offered by other issuers as well, which take historical prices into account, and is set by the regulatory framework. Even in the traditional finance space, it is not uncommon to see risk factors of 6 or 7."

    Liquid staking enables users to maintain liquidity, despite locking their cryptocurrency to earn rewards for securing a blockchain network. Lido, the dominant liquid staking player, has more than $13 billion ETH staked, commanding a 76% market share of liquid staking derivatives on Ethereum, data from blockchain analytics firm Nansen show.

    Edited by Sheldon Reback.

    UPDATE: (June 12, 18:30 UTC): Added Enright's commentary


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    Sage D. Young was a tech protocol reporter at CoinDesk. He owns a few NFTs, gold and silver, as well as BTC, ETH, LINK, AAVE, ARB, PEOPLE, DOGE, OS, and HTR.

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