21Shares and Chainlink Team Up to Roll Out Proof-of-Reserve for Spot Bitcoin ETF ARKB –

Spot bitcoin ETF provider 21Shares announced it will be using Chainlink’s proof-of-reserve service that enables crypto denizens to monitor the underlying BTC collateralization of its ARKB ETF.

21Shares, a spot bitcoin exchange-traded fund (ETF) provider, announced Wednesday morning that crypto investors can start to monitor the underlying BTC collateralization of its ARKB ETF, through the ETF provider’s use of Chainlink’s proof-of-reserve (PoR) service. 

According to a press release shared with Unchained, 21Shares using Chainlink’s PoR service is an attempt by the ETF provider to assure investors that it does have enough bitcoins in reserve to back up its less than three-month-old ETF. 

Fourth-Largest BTC Holder Among Successful ETF Applicants

ARKB, the spot BTC ETF that was jointly launched by 21Shares and ARK Investment Management, is the fourth-largest holder among the cohort of ETFs approved by the SEC in January with at least 30,880 bitcoins worth about $1.8 billion as of the time of publication, according to an onchain Dune dashboard created by Hildebert Moulié, aka Hildobby, a data scientist at VC firm Dragonfly.

Read More: What Are Proof of Reserves in Crypto?

“This PoR feed is a type of offchain reserves feed that pulls reserves data directly from Coinbase,” the press release stated. “As Coinbase has direct access to the accounts or vaults holding the reserve assets, it can calculate the total value of reserves and report the data onchain via Chainlink oracles.”

BTC Price at More Than Two-Year High

The announcement of 21Shares’ proof of reserves for its spot BTC ETF comes as the price of the underlying asset reached a more than two-year high, increasing more than 35% in the past 30 days to $57,061, per CoinGecko; and as spot BTC ETFs are seeing massive inflows, per Bloomberg ETF analyst James Seyffart.

A firm’s proof of reserve is a form of transparency that ideally uses cryptographic mechanisms to enable crypto firms like centralized exchanges or ETF providers to publicly attest for their onchain collateral, proving their solvency. They became especially popular following the aftermath of the collapse of the crypto exchange FTX spearheaded by the currently incarcerated Sam Bankman-Fried. 

Read More: Trial Day 11, How FTX Spent $9 Billion of Its Customers’ Money

During Sam Bankman-Fried’s trial, the prosecution presented a since-deleted thread on X back in November 2022 claiming, “FTX has enough to cover all client holdings.” FTX collapsed because its holdings were significantly smaller than its obligations to its depositors.