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Regulatory Wins and the Quest for Simplifying Crypto’s Complexity

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7 månader sedan

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17 september, 2024

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• A more aggressive rate cut would likely alarm markets, signaling recession risks.

• Crypto regulation is advancing, with U.S. regulators regretting the confusion around ”cryptoasset securities.”

• The UK is moving toward recognizing cryptoassets as personal property, offering stronger legal protections in cases of fraud, theft, and bankruptcy.

• Rebranded Upgrades Season:

o Polygon’s migration from MATIC to POL aims to enhance multichain interoperability and boost investor interest, driving a 15% price jump for POL.

o Maker is transitioning from MKR to SKY, introducing new governance features and rewards, signaling a major shift in the protocol’s operation and community control.

• Multiple new approaches are being adopted to simplify crypto’s fragmented user experience:

o Socket network: offers an auction orderflow marketplaces that allows existing stakeholders to fulfill users desires, disregarding the targeted networks, rather than solving for native interoperability.

o Rabby Wallet: New Update allows one of the leading EVM-wallet users to pay with USDC as a gas currency.

Figure 1 – Bitcoin’s Price Against U.S. Macro Data

Source: Coingecko, 21Shares

Welcome to arguably the most anticipated week since July 2023, when the Federal Reserve raised interest rates one last time to reach the highest point since 2001. Nevertheless, there is so much more to unpack this week, let’s dig in.

Rate cuts: U.S. annual inflation met expectations at 2.5%, down from 2.9%. Core inflation, which excludes volatile food and energy prices, rose 0.3% monthly, exceeding forecasts. The Federal Open Market Committee (FOMC), meeting on Wednesday, typically focuses on core data. Aside from inflation, the Fed is also expected to consider labor market data, which saw slightly more people file for unemployment claims than expected. However, retail sales outperformed, indicating robust consumer spending, giving a healthier picture of the U.S. economy.

At the time of writing, the CME FedWatch tool predicts a 63% chance of a 50 bps rate cut, contrary to recent sentiment. A larger cut might signal greater fears of a recession, potentially impacting risk assets in the short term. However, this doesn’t alter Bitcoin’s fundamental long-term outlook. Further economic weakening could lead to Fed balance sheet expansion, historically boosting Bitcoin demand.

In the lead up to the FOMC meeting, crypto celebrated a few regulatory wins last week.

Prediction markets receive an initial nod: Polygon-based Polymarket has been gaining traction for its U.S. elections betting venue, attracting over 60K monthly active users, making more than $450M in trading volume, as shown below in Figure 2. In parallel, prediction markets have drawn some legal concerns in the traditional world.

The Commodity Futures Trading Commission (CFTC) said that prediction markets are vulnerable to manipulation. On September 6, the agency filed a motion to shut down the election betting markets offered by Kalshi, an exchange and prediction market that launched in July 2021. A DC judge released an opinion on September 12, essentially allowing betting platform Kalshi to compete with Polymarket which had been pushed to pursue its operations off-shore after paying a $1.2-million fine in 2022.

Figure 2 – Polymarket Monthly Users and Volume

Source: Dune Analytics

Why does this matter? Essentially, the ruling could clear the pathway for a crypto-native protocol to participate in the U.S. political sphere, thus potentially allowing one of crypto’s dominant applications to play a bigger role outside the boundaries of the web3 industry. In line with this, diversifying blockchain utility is as crucial as portfolio diversification. Expanding use cases attracts a broader user base beyond traditional Web3 enthusiasts. For example, Polymarkets has seen consistent user growth since May, bucking the trend of overall market decline. This highlights the demand for blockchain applications that transcend crypto’s typical boundaries.

SEC’s change of heart? In a recent settlement agreement with the SEC, crypto exchange eToro agreed to de-platform all cryptoassets except for BTC, Bitcoin Cash, and ETH, essentially claiming everything else was a security. More importantly, the SEC announced its “regrets [for] any confusion [the term crypto asset securities] may have invited” in a footnote of another filing attached to the agency’s lawsuit against Binance.

Although the aforementioned instances do not count as a reversal of the agency’s previous position, they still indicate a willingness to reconsider its approach to crypto regulation. This could spark the beginning of a more industry-specific regulatory framework in the future and alleviate some of the uncertainty surrounding the overall market. This could push pending bills to the finish line, one prime example is the Financial Innovation and Technology for the 21st Century Act that passed by the House of Financial Services Committee in May 2024, with “overwhelming” bipartisan support.

Check out our Monthly Wrap for May 2024, where we broke down what this act would mean for the cryptoassets industry, replacing the four-pronged Howey Test with five conditions for a decentralized system.

Crypto as a personal property: The UK government introduced the Property (Digital Assets etc.) Bill before the Parliament on September 11, legally recognizing cryptoassets and non-fungible tokens as personal property. Although this move comes as part of a wider trend to turn the UK into a crypto hub, this bill wants to specifically tackle owner protection. Legal protections would include:

• Rights in disputes and instances of improper interference; legal mechanisms like freezing injunctions could be applied to digital assets.

• Incorporation in bankruptcy and insolvency processes; digital assets could be included in estates that may be liquidated to settle debts with creditors.

• Legal measures can be taken in cases of fraud and theft.

We saw the first implementation of this bill a day after its introduction, when a UK High Court ruled USDT as personal property in the case of a plaintiff who claimed that he was defrauded of over £2.5M ($3.3M) in cryptocurrency, including USDT. This is a meaningful step forward to achieving crypto’s mass adoption, with more clarity being offered around its status under different jurisdictions.

The Era of Rebranded Upgrades: Cutting-Edge Improvements or a Corporate Ploy to Drive Interest?

As the crypto landscape continues to mature, several high-profile networks are executing significant upgrades to enhance scalability, security, and token utility. One of the most pivotal transformations is Polygon’s migration from MATIC to POL, a cornerstone of Polygon 2.0, aimed at evolving the network into a multi-chain ecosystem. Alongside this, Maker is also undergoing major transitions—highlighting a broader trend of protocol upgrades that could redefine these platforms’ value propositions. It could spark renewed investor interest as these corporate moves reignite attention on the network.

Polygon’s MATIC → POL Migration: The Shift to Multichain Interoperability

On September 4, the Polygon network witnessed a major leap in its MATIC to POL migration. Prior to this date, less than 1% of MATIC had been converted to POL. However, as all MATIC tokens on Polygon PoS automatically migrated to POL, the upgrade rate surged and is currently almost at 70%, as shown below.

Figure 3 – MATIC to POL Migration

Source: Dune Analytics

This shift was accelerated by key exchanges like Binance completing their migration last week. POL’s listing triggered a 15% price jump in POL, underscoring the market’s response to this upgrade. The migration not only brings technical advancements to the network but also serves as a catalyst for investor’s interest. In that view, the migration has the potential to spotlight Polygon’s role and revitalize the chain after a period of slow growth, where Total Value Locked (TVL) has not grown since the start of 2023, as shown below.

Figure 4 – Polygon Total Value Locked (TVL)

Source: DeFiLlama

The POL token represents more than just a new name for MATIC—unlocking a range of enhanced features aimed at improving the utility and scalability of the entire Polygon ecosystem. Here are the key takeaways:

• Expand the role of POL as a hyper-productive token securing the entire Polygon-based ecosystem, not just Polygon POS. This should amplify the demand for POL as it becomes increasingly vital for securing the entire ecosystem while increasing revenue share for Polygon’s validators

• Enhance Interoperability: by Introducing the AggLayer which offers a unifying and trust-minimized framework for sharing liquidity across the Polygon Ecosystem

For a deeper understanding of what this upgrade means to the Polygon ecosystem, check out this previous breakdown.

Similarly, Maker, one of the largest DeFi protocols by revenue generation, as shown below, is set to initiate its long-awaited migration from MKR to SKY this Wednesday. This marks a key milestone in the launch of the Sky Protocol, which also includes the introduction of the SKY governance token and the USDS stablecoin.

Much like Polygon’s transition, this upgrade represents a significant shift in how Maker operates and is part of its broader rebranding. The migration will begin on September 18, giving MKR holders the option to convert their MKR tokens to SKY at a rate of 1 MKR to 24,000 SKY. Both tokens—MKR and SKY—will coexist for the foreseeable future, meaning users can choose whether to upgrade or continue holding MKR. Importantly, no definitive sunset date for MKR has been announced, allowing flexibility for token holders. With SKY set to become the primary governance token, the upgrade introduces advanced governance features intended to increase community participation and give the community greater control over the protocol’s future direction.

Figure 5 – Revenue Generated by DeFi Protocols

Source: DeFiLlama

What we know so far is that the SKY token will bring several notable features and mechanisms that could strengthen Maker’s governance and reward structure. Here are the key enhancements:

• Elevated Token Rewards: SKY introduces a 600M annual SKY token reward pool for participants holding USDS, the upgraded stablecoin replacing DAI.

• Sealed Activation and Regular Activation: SKY holders can choose between Sealed Activation, which involves committing governance tokens for a longer term in exchange for higher rewards (primarily in USDS), and Regular Activation, which allows users to stake tokens without a lock-up period. These features are designed to encourage long-term governance participation and ecosystem stability.

• Introduction of Stars (Formerly SubDAOs): Maker’s governance will be divided into smaller, decentralized units called Stars. These units will allow for more specialized governance, enabling the protocol to scale more effectively while enhancing decision-making within specific areas of the ecosystem.

• Enhanced Stablecoin (USDS): DAI holders can upgrade to USDS at a 1:1 ratio, unlocking access to SKY token rewards. USDS also includes additional features, such as the Savings Rate, which has been a core part of Maker’s lending system for over seven years.

Considering that Maker’s upgrade is quite significant, stay on hold for a dedicated report into what the upgrade means, the remaining questions that still need to be resolved to fully comprehend its potential impact.

All in all, the Maker and Polygon migrations are part of a broader trend in the crypto space as major networks undergo significant corporate actions to remain competitive. Just as Polygon has shifted to a multichain structure with POL to reinvigorate its ecosystem, Maker is embarking on a journey to redefine governance and rewards with SKY.

Abstracting Crypto’s Complexity

One of the hurdles slowing crypto’s adoption is the absence of a user-intuitive experience. For example, there are more than 380 networks across the smart-contract platforms (alternative L1s) and scaling solutions (L2s) built on top of Ethereum, which results in a daunting maze for newcomers.

On the L1 level, fragmentation creates significant user challenges. Managing multiple wallets with diverse seed phrases and transaction methods is cumbersome. The need for crypto forex services (bridging solutions) across +300 networks further complicates asset transfers. Additionally, users must juggle various native gas tokens (e.g., ETH, AVAX, POL) for transacting on different blockchains.

Alternatively, across the L2 vertical, interoperability persists as the prime challenge. Despite Ethereum-based scaling solutions sharing a common settlement layer, thus users can leverage the same wallet (Metamask), each network’s unique approach to scaling creates barriers for cross chain transfers. This diversity hinders the development of a universal forex exchange that could seamlessly connect the +80 L2 networks.

Given this extent of fragmentation, it’s crucial to examine the different interoperability approaches. While chain abstraction is a broad topic deserving its own analysis, this report will focus specifically on account and wallet abstraction as key strategies to enhance user experience.

Figure 6 – Mapping of the Crypto’s Modularity Industry

Source: OurNetwork

On one side, Account Abstraction refers to the ability to customize blockchain accounts and make them smarter. In this regard, Ethereum’s Pectra upgrade will be one of the key milestones to enable this functionality on the network level, thus making it easier to create smarter wallets. That said, with Coinbase’s smart wallet being the first major adopter of the ERC-4337, its growth has been impressive so far, onboarding a total cumulative number of ~37K users, as seen in Figure 7.

Figure 7 – Weekly New Users of Coinbase Smart Wallets (CSW)

Source: Dune Analytics

However, we expect the standard’s adoption to accelerate significantly after the activation of the Ethereum Pectra upgrade. Nevertheless, it is worth noting that this trend is gaining significant momentum, as illustrated in Figure 8 below.

Figure 8 – Monthly ERC-4337 (AA) Interactions

Source: Dune Analytics

Alternatively, Socket Network, an interoperability-focused infrastructure provider, offers an innovative solution to cross-chain challenges through its Modular Order Flow Auction (MOFA) protocol. In that, Socket creates a competitive marketplace where execution agents (validators and sequencers) bid to fulfill cross-network user-requests. This system employs chain-abstracted bundles, streamlining multi-network transactions and eliminating the need for users to directly interact with different networks. Socket’s approach offers advantages to both users and existing stakeholders, positioning it as a noteworthy alternative to Coinbase’s solution in addressing cross-chain interoperability.

Users: Enjoy improved execution and a simplified experience across fragmented crypto infrastructure.
Stakeholders (sequencers, validators, market makers): Gain expanded roles and increased fee-earning opportunities within the ecosystem.

While related, wallet abstraction focuses on enhancing the user interface itself, simplifying wallet creation and management through familiar web2 credentials, and streamlining cross-blockchain interactions. In essence, account abstraction implements protocol-level changes, whereas wallet abstraction improves the application-level experience.

Rabby Wallet, one of the leading wallet providers, exemplifies this trend with its new gas abstraction feature. This innovation allows users to deposit USDC or USDT into a dedicated gas account, enabling them to pay transaction fees across multiple supported networks using these stablecoins. While this optimized transaction method may incur slightly higher costs due to multiple asset transfers, the added convenience likely outweighs the premium for most users.

In conclusion, the ongoing efforts to simplify crypto’s complexities are vital for attracting new users. To achieve mainstream adoption, the crypto experience should mirror the user-friendly nature of Web 2.0, eliminating the need for users to grapple with technical concepts like gas fees, seed phrases, or cross-network transfers. These initiatives aim to transform crypto interactions into a seamless, familiar web experience, paving the way for broader acceptance and usage.

What’s happening this week?

Source: Forex Factory, 21Shares

Research Newsletter

Each week the 21Shares Research team will publish our data-driven insights into the crypto asset world through this newsletter. Please direct any comments, questions, and words of feedback to research@21shares.com

Disclaimer

The information provided does not constitute a prospectus or other offering material and does not contain or constitute an offer to sell or a solicitation of any offer to buy securities in any jurisdiction. Some of the information published herein may contain forward-looking statements. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties and that actual results may differ materially from those in the forward-looking statements as a result of various factors. The information contained herein may not be considered as economic, legal, tax or other advice and users are cautioned to base investment decisions or other decisions solely on the content hereof.

Liknande ämnen:21Shares MATIC Polygon

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Crypto in the macro lens: Opportunities and risks in the current environment

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Japanese power company explores mining bitcoin, UK bill on digital assets, and stablecoin payments in Singapore hit milestone

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From digital asset to safe haven: Why is Bitcoin acting like gold?

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3 timmar sedan

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28 april, 2025

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Bitcoin’s price has taken a different path from U.S. stocks over the past weeks. While major indexes such as the S&P 500 and Nasdaq have experienced declines, Bitcoin has risen to its highest levels in recent months, positioning itself as a safe haven, similar to gold. Understand how Bitcoin and gold have been synced for some time and what the correlation might look like in the future.

Ethereum’s big reboot: Why investors should be excited

Ethereum is making headlines due to a potential change in its core software, the Ethereum Virtual Machine (EVM), that operates across thousands of computers, enabling Ethereum to execute smart contracts and securely track transactions. However, Ethereum’s co-founder, Vitalik Buterin, has suggested replacing the EVM with a new system called RISC-V. Discover why the change is necessary and its potential impact on investors.

Thousands of altcoins, but no altcoin season: What comes next?

Over the past year, the crypto market has entered a new era. Bitcoin hit new all-time highs, outperforming other cryptocurrencies and decoupling from the stock market. Unlike previous cycles, the expected “altcoin season” did not occur, with Bitcoin remaining strong and money not flowing into other cryptocurrencies or altcoins. So, the big question is: Has altcoin season run its course?

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WELC ETF ger exponering mot företag inom sällanköpsvaror

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4 timmar sedan

den

28 april, 2025

Redaktionen

Amundi S&P Global Consumer Discretionary ESG UCITS ETF DR EUR (D) (WELC ETF) med ISIN IE00061J0RC6, strävar efter att spåra S&P Developed Ex-Korea LargeMidCap Sustainability Enhanced Consumer Discretionary index. Det S&P-utvecklade ex-Korea LargeMidCap Sustainability Enhanced Consumer Discretionary-indexet spårar stora och medelstora företag från den diskretionära konsumentsektorn. ESG-kriterier (miljö, social och bolagsstyrning) beaktas vid valet av värdepapper.

Den börshandlade fondens TER (total cost ratio) uppgår till 0,18% p.a.. Amundi S&P Global Consumer Discretionary ESG UCITS ETF DR EUR (D) är den billigaste ETF som följer S&P Developed Ex-Korea LargeMidCap Sustainability Enhanced Consumer Discretionary index. ETFen replikerar det underliggande indexets prestanda genom fullständig replikering (köper alla indexbeståndsdelar). Utdelningarna i ETFen delas ut till investerarna (Årligen).

Amundi S&P Global Consumer Discretionary ESG UCITS ETF DR EUR (D) är en mycket liten ETF med 5 miljoner euro förvaltade tillgångar. Denna ETF lanserades den 20 september 2022 och har sin hemvist i Irland.

Investeringsmål

AMUNDI S&P GLOBAL CONSUMER DISCRETIONARY ESG UCITS ETF DR – EUR (D) försöker replikera, så nära som möjligt, resultatet för S&P Developed Ex-Korea LargeMidCap Sustainability Enhanced Consumer Discretionary Index (Netto Total Return Index). Denna ETF har exponering mot stora och medelstora företag i utvecklade länder. Den innehåller uteslutningskriterier för tobak, kontroversiella vapen, civila och militära handeldvapen, termiskt kol, olja och gas (inkl. Arctic Oil & Gas), oljesand, skiffergas. Den är också utformad för att välja ut och omvikta företag för att tillsammans förbättra hållbarhet och ESG-profiler, uppfylla miljömål och minska koldioxidavtrycket.

Handla WELC ETF

Amundi S&P Global Consumer Discretionary ESG UCITS ETF DR EUR (D) (WELC ETF) är en europeisk börshandlad fond. Denna fond handlas på flera olika börser, till exempel Deutsche Boerse Xetra.

Det betyder att det går att handla andelar i denna ETF genom de flesta svenska banker och Internetmäklare, till exempel Nordnet, SAVR, DEGIRO och Avanza.

Börsnoteringar

Börs	Valuta	Kortnamn
gettex	EUR	WELC
XETRA	USD	WEL2
XETRA	EUR	WELC

Största innehav

Denna fond använder fysisk replikering för att spåra indexets prestanda.

Namn	Valuta	Vikt %	Sektor
AMAZON.COM INC	USD	18.89 %	Sällanköpsvaror
TESLA INC	USD	13.29 %	Sällanköpsvaror
HOME DEPOT INC	USD	5.75 %	Sällanköpsvaror
LVMH MOET HENNESSY LOUIS VUI	EUR	5.44 %	Sällanköpsvaror
TOYOTA MOTOR CORP	JPY	4.58 %	Sällanköpsvaror
MCDONALD S CORP COM NPV	USD	2.63 %	Sällanköpsvaror
LOWE S COS INC COM US 0.50	USD	2.38 %	Sällanköpsvaror
SONY GROUP CORP (JT)	JPY	2.25 %	Sällanköpsvaror
BOOKING HOLDINGS INC	USD	2.02 %	Sällanköpsvaror
TJX COMPANIES INC	USD	1.89 %	Sällanköpsvaror

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Introduction to Celestia

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5 timmar sedan

den

28 april, 2025

Redaktionen

To understand Celestia’s value and its role in the ecosystem, it’s helpful to first understand how traditional blockchain systems are structured.

Most blockchains, like Ethereum or Bitcoin, are monolithic which means they perform all major functions (consensus, data availability, and execution) on a single layer. This design ensures security but according to new modular networks, limits scalability and flexibility.

The modular blockchain thesis, which Celestia is leading, proposes separation of layers and respective responsibilities in the network. Instead of having one network and its validators perform all of its functions, it may be better to have specialized layers:

• Consensus Layer: Ensures that all nodes agree on the order of transactions.

• Data Availability Layer: Ensures transaction data is accessible to all participants.

• Execution Layer: Processes the actual logic and computation of smart contracts.

By unbundling these components, developers can build more efficient, flexible systems that scale far beyond what monolithic blockchains can support. Not all applications need similar levels of security and not all applications need to scale up to millions of transactions. Additionally, one application might be scaling beyond the capabilities of its host network, severely effecting the available data throughput of other applications. This limits developers to the monolithic technology stack provided by a virtual machine such as Ethereum’ EVM.

The Issue of Data Availability

One of the most misunderstood yet crucial components of any blockchain is data availability. In simple terms, it ensures that the data behind each block is fully accessible and verifiable by all participants in the network. Another way to describe it is as the confidence a user can have that the data required to verify a block is really available to all network participants. Data availability is therefore important to all stakeholders of the blockchain ecosystem.

If a block producer withholds data, then nodes cannot verify the block, which leads to potential censorship or fraud.

Traditionally, a blockchain network can offer data availability with the following mechanisms:

• Full Replication: Every node stores the entire blockchain and verifies all data. Secure but not quite scalable.

• Sharding: Breaks the blockchain into smaller pieces (shards), spreading data across nodes. Scalable but highly complex to implement.

• Committee-Based Models: Small groups of nodes are trusted to verify data availability. Efficient, but less decentralized.

Celestia takes a completely different approach using a novel method called Data Availability Sampling (DAS). Instead of requiring every node to download all data, DAS allows lightweight nodes to randomly sample small chunks of a block. If enough pieces are retrievable, the node can confidently assume the full block is available. This slashes resource requirements while maintaining security and decentralization.

Why Data Availability Matters

Data availability might sound like a nerdy technical term, but it’s one of the most important yet one of less invisible parts of how blockchains work.

Let’s say you’re using a crypto app to trade tokens, store art, or move money. Every time you do something, that action (also referred to as a transaction) needs to be recorded and shared with the rest of the network so everyone agrees it happened. If that data disappears or can’t be verified, the whole system becomes untrustworthy. You might think your tokens moved but if no one else can see that record or a different version of that record, it’s as if it never happened.

Here’s a real-life parallel: imagine a public scoreboard at a sports game. If the scorekeeper shows the score to only a few people and then hides the board, how can the rest of the crowd trust the result? Everyone needs to see the score to believe it’s fair. In crypto, data availability is what makes sure the scoreboard is always visible to all participants at any time.

How DAS Changes the Game

Traditionally, ensuring data availability meant every node had to download and verify the entire block of data for any purpose related to particular data inside the block, like reading a whole newspaper just to check one article. Ethereum and most competing monolithic layer-1’s operate this way. It works, but it’s expensive, slow, and becomes less practical as blockchains scale in terms of data throughput required by its Dapps therefore limiting the types of applications that developers can build.

Celestia’s Data Availability Sampling (DAS) is a breakthrough that lets even simple devices (like smartphones) verify that a block’s data is available—by checking just a few random pieces. If enough pieces are found and correct, the network can be confident the full block is truly there and correct.

This innovation means:

• Light clients can safely participate in the network without downloading everything.

• Rollups and app-chains can post their data to Celestia with minimal overhead.

• Scalability skyrockets without sacrificing decentralization.

Celestia’s Role in Scaling Applications

Celestia is the first blockchain designed specifically to be a modular data availability layer. That means it doesn’t execute smart contracts or handle transactions directly, instead, it provides a foundation for others to build new networks, also referred to as rollups.

Developers can launch rollups or full execution environments, and use Celestia to handle the consensus and data availability side. This unlocks several key benefits:

• Massive scalability: Apps can scale independently from each other.

• Customization: Developers choose their own virtual machines, consensus mechanism and execution logic.

• Decentralization: Thanks to DAS, even small devices can validate the system.

This approach flips the script on how we think about launching and scaling blockchains. Instead of competing for space on a monolithic chain, apps get their own chains, backed by Celestia’s secure and scalable data availability layer while giving developers full stack control over their applications.

Celestia Enables Scalability and Offers Full-Stack Control

Using the restaurant example from Sui vs Aptos. Imagine a big, busy restaurant where the chefs, waiters, and cashiers all work in the same small kitchen. It gets crowded, orders take forever, and sometimes things go wrong while the backlog of orders keeps growing. That’s how traditional blockchains work, doing everything in one place.

Now imagine if the restaurant separated the jobs: the chefs cook in a big kitchen, waiters serve from a clean dining area, and the cashiers handle payments at the front desk. Everything runs smoother, faster, and the restaurant can grow in a environment that is less prone to congestion. That is what Celestia is doing for blockchains. Let’s say a small specialty restaurant opens up next door, leveraging Celestia’s register and order management system. That new restaurant can fully focus on delivering the best food and experience to customers, knowing that Celestia’s technology won’t be the limiting factor when scaling up their kitchen. The modularity that Celestia’s restaurant offers is allowing a lot of small scale restaurants to exist without the overhead of individual administrative work. It goes even a step further, Celestia allows you to just use it register while letting smaller restaurants pick their own kitchen (execution environment) and order management system (consensus layer).

In conclusion, Celestia is challenging the believe that blockchains should always be monolithic and blockchains need to offer the same technology stack to all developers on its chain. It is a significant leap forward in the crypto ecosystem and opens possibilities that were previously not feasible.

Diversify Crypto Exposure to Modular Blockchain Technology with the VanEck Celestia ETN

Key features of the VanEck Celestia ETN

• Celestia enables secure scaling of blockchain applications with modular technology.

• Fully-collateralized by TIA in cold-storage.

• Total return of TIA: Tracks the MarketVector™ Celestia VWAP Close Index (MVTIAV).

Why VanEck Crypto ETNs? Here’s why:

• With nearly 70 years in asset management and a strong track record in crypto, we bring deep industry knowledge and proven reliability.

• We combine traditional financial strengths with cutting-edge crypto innovation, backed by a CEO who truly believes in crypto’s future.

• We ensure clarity in our product structures and avoid high-risk or opaque practices, with assets fully backed by cryptocurrency in secure cold storage.

• Our assets are secured by a licensed European bank in Liechtenstein, providing top-tier compliance and security.

• We use the safest institutional custody setup available, prioritizing your security over cost savings.

Crypto is an asset class with high potential returns but investing in digital assets comes with great risk, why choose products that potentially introduce even more risks? Choose VanEck for a secure, transparent, and expertly managed crypto investment experience.

Main Risk Factors:

Investors should note that there is no direct ownership for the crypto assets, but a claim against Issuer to receive such assets.

• Complexity risk: The complexity of the project and its technological concepts make it challenging to assess its viability and valuation.

• Adoption risk: Celestia introduces additional adoption risk as it is uncertain if the concept of modular blockchains will succeed.

• Technology risk: Celestia introduces additional technology risk due to the technology being less mature and therefore could be more prone to bugs and exploits.

• Regulatory Risk: market disruptions and governmental interventions may make digital assets illegal.

• Risk of Losses and Volatility: The trading prices of many digital assets have experienced extreme volatility in recent periods and may continue to do so. There is a risk of total loss as no guarantee can be made regarding custody due to hacking risk, counterparty risk and market risk.

• Other risks specific to this ETN’s Digital Assets can also be found on the VanEck Crypto Academy.

This is not financial research but the opinion of the author of the article. We publish this information to inform and educate about recent market developments and technological updates, not to give any recommendation for certain products or projects. The selection of articles should therefore not be understood as financial advice or recommendation for any specific product and/or digital asset. We may occasionally include analysis of past market, network performance expectations and/or on-chain performance. Historical performance is not indicative for future returns.

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Performance quoted represents past performance, which is no guarantee of future results and which may be lower or higher than current performance.

Current performance may be lower or higher than average annual returns shown. Performance shows 12 month performance to the most recent Quarter end for each of the last 5yrs where available. E.g. ’1st year’ shows the most recent of these 12-month periods and ’2nd year’ shows the previous 12 month period and so on. Performance data is displayed in Base Currency terms, with net income reinvested, net of fees. Brokerage or transaction fees will apply. Investment return and the principal value of an investment will fluctuate. Notes may be worth more or less than their original cost when redeemed.

Index returns are not ETN returns and do not reflect any management fees or brokerage expenses. An index’s performance is not illustrative of the ETN’s performance. Investors cannot invest directly in the Index. Indices are not securities in which investments can be made.No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission of VanEck.

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