Cryptocurrency investment firm CoinShares has introduced two new exchange-traded products (ETPs) that bring staking rewards directly to investors—marking a significant innovation in the digital asset investment space. The newly launched Physical Staked Polkadot ETP and Physical Staked Tezos ETP are now available on Germany’s Xetra exchange, offering investors exposure to two major proof-of-stake blockchains while enabling them to benefit from annual staking yields.
These ETPs are part of a growing trend of institutional-grade crypto products that bridge traditional finance with decentralized networks. Designed to be 100% physically backed, the offerings ensure full asset transparency and security, with custody managed by Komainu, a leading digital asset custodian.
How the Staking ETPs Work
Unlike traditional crypto ETPs that deduct management fees over time, reducing investor entitlement, CoinShares’ new staked ETPs operate differently. The firm has restructured its fee model to pass staking rewards directly to shareholders.
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Here’s how it works:
- Management fee reduced to 0%: To enable reward distribution, CoinShares has eliminated the standard 1.5% management fee.
- Daily adjustment of coin entitlement: Instead of declining over time, the number of underlying assets (DOT or tez) an investor is entitled to increases daily based on accrued staking rewards.
- Annualized yield estimates: Investors can expect approximately 5% annualized returns from Polkadot staking and 3% from Tezos, distributed passively through their ETP holdings.
This mechanism allows investors to earn staking rewards without managing private keys, running validator nodes, or locking up assets—making it ideal for both retail and institutional participants seeking hassle-free exposure to proof-of-stake networks.
100% Physically Backed with Redemption Options
Security and transparency are central to these new products. Each ETP is fully backed by physical DOT and tez tokens held in cold storage by Komainu. The staked assets remain within the custodial framework at all times and do not move during the staking process.
Investors also have the option to redeem their ETP shares directly for the native blockchain assets—DOT or tez—providing flexibility and direct ownership when desired. This redemption feature enhances trust and aligns with regulatory expectations in European markets.
Expanding Beyond Bitcoin and Ether
While Bitcoin (BTC) and Ethereum (ETH) continue to dominate institutional crypto investment strategies, demand for alternative digital assets is rising—especially among self-directed investors.
As CoinShares executives noted last month, there's growing interest in altcoins like Polkadot and Tezos, which offer unique technological value propositions beyond simple store-of-value or smart contract functionality.
Polkadot enables interoperability between blockchains through its relay chain architecture, while Tezos is known for its on-chain governance and energy-efficient proof-of-stake consensus. These features make them compelling long-term investments for tech-savvy investors.
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The launch of these staked ETPs reflects CoinShares’ strategic shift toward meeting this demand and expanding access to high-potential digital assets.
CoinShares’ Full ETP Lineup
The Polkadot and Tezos ETPs join four existing physically backed products in CoinShares’ ETP suite:
- Physical Bitcoin ETP (launched in 2015 — the first of its kind in Europe)
- Physical Ether ETP
- Physical Litecoin ETP
- Physical XRP ETP
Together, these products manage approximately **$475 million in assets**, according to a recent CoinShares report. Despite seeing $14 million in outflows during the first three weeks of 2022, the broader category of digital asset investment products recorded $14 million in inflows the following week—breaking a five-week streak of withdrawals.
Notably, this rebound occurred amid market price weakness, suggesting many investors viewed the dip as a strategic buying opportunity.
Why Staked ETPs Matter for the Future of Crypto Investing
Frank Spiteri, Chief Revenue Officer at CoinShares, emphasized the forward-looking nature of these launches:
“We are excited to push the industry forward again with these staked ETP launches. We believe that over time this will become investors’ preferred structure for ETPs tracking digital assets based on proof-of-stake blockchains.”
This sentiment underscores a broader shift: as proof-of-stake networks grow in prominence, investment vehicles must evolve to capture their full economic potential—not just price appreciation, but also yield generation.
Staked ETPs represent a hybrid solution that combines regulatory compliance, institutional custody, and passive income—three critical components for mainstream adoption.
Core Keywords:
- CoinShares ETPs
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- Tezos staking
- crypto exchange-traded products
- proof-of-stake ETPs
- physically backed crypto
- staking rewards
- digital asset investment
Frequently Asked Questions (FAQ)
Q: What are staking rewards, and how do they work in these ETPs?
A: Staking rewards are incentives paid to users who help validate transactions on proof-of-stake blockchains. In CoinShares’ ETPs, these rewards are automatically accrued and reflected in increasing coin entitlements for investors, with no action required on their part.
Q: Are the staked assets locked or at risk?
A: No. The underlying DOT and tez tokens are securely held by Komainu and remain fully accessible. The staking process is managed off-chain, ensuring safety and liquidity without compromising reward generation.
Q: Can I redeem my ETP shares for actual DOT or tez?
A: Yes. Investors have the option to redeem shares directly for the native cryptocurrencies, providing a clear path to ownership if desired.
Q: How often are staking rewards distributed?
A: Rewards are accrued daily and reflected in the growing coin entitlement per share. There’s no need for manual claiming or periodic payouts.
Q: Is there a management fee for these ETPs?
A: No. The management fee has been reduced to 0% to allow full pass-through of staking rewards to investors.
Q: Where are these ETPs listed?
A: The Physical Staked Polkadot and Tezos ETPs are currently available on Xetra, one of Germany’s largest electronic trading platforms.
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CoinShares continues to lead innovation in regulated crypto investment solutions. With its latest staked ETPs, it sets a new benchmark for how investors can gain secure, yield-generating exposure to proof-of-stake ecosystems—without sacrificing control or convenience.