In a recent move, the asset managers behind the ARK Bitcoin ETF (ARKB), 21Shares and Ark Investment, announced a partnership with decentralized oracle network Chainlink to set a “new standard” for transparency and security in the world of tokenized assets.
Chainlink’s PoR to Verify ARKB Bitcoin ETF Reserves
If announced Driving this integration is Monday’s introduction of Chainlink’s Proof of Reserve (PoR) solution, which is said to provide a secure and transparent way to verify the underlying Bitcoin reserves backing the ARKB ETF.
The asset managers, along with the Chainlink network, have announced that they will be directly leveraging Coinbase’s assets data feedsChainlink’s PoR can automatically update the on-chain reference contract with the total value of ARKB’s Bitcoin holdings. Johann Eid, Chief Business Officer of Chainlink Labs, said:
We’re excited to partner with 21Shares as they help reshape the way the world interacts with tokenized assets and scale accessibility to the masses. By providing real-time, tamper-proof data on Bitcoin reserves, Chainlink Proof of Reserve not only enhances the security and transparency of the ARK 21Shares Bitcoin ETF, but also gives institutions and market participants the confidence to become actively involved in on-chain finance.
‘Increasing transparency and safety’
The benefits of this integration were further detailed in the announcement, starting with the fact that investors in the ARKB ETF will have access to “frequent updates” on the collateralization of the underlying BTC holdingseliminating the need for manual verification.
Secondly, Chainlink’s oracle network is expected to help ensure the reliability and resilience of the Proof of Reserve data. The parties believe that by eliminating central points of failure, the system will be able to deliver reliable on-chain updates at all times, resulting in increased overall security for the ARKB Bitcoin ETF.
Perhaps most importantly, the transparency that Chainlink’s Proof of Reserve would bring to the ARKB Bitcoin ETF would allow investors to independently asset collateral of the ARKB ETF. Ophelia Snyder, co-founder and president of 21 Shares US, said:
By integrating Chainlink, the market leader in Proof of Reserves for tokenized assets, we are setting a new standard for combining transparency and security in digital asset management. This partnership enables us to provide an unparalleled level of visibility and security for our investors’ holdings for ARKB, reinforcing 21Shares’ commitment to leading the way in secure, transparent asset management.
At the time of writing, the largest cryptocurrency in the market, bitcoin, is currently trading at $67,960. Over the past hour, the price has dropped to that level, after hitting a monthly high of $70,000 in the early hours of Monday’s trading session.
Main image of DALL-E, chart from TradingView.com