Explore the New Tezos-Based ETP on SIX Exchange for Passive Income

The Tezos ETP: What’s It All About?

Switzerland’s main stock exchange, SIX, has just stepped up its game by listing a new Tezos-based exchange-traded product (ETP) under the symbol AXTZ. Issued by fintech player Amun AG in collaboration with the Tezos Foundation, this innovative financial instrument went live for trading on November 5. So, what exactly does this ETP offer? Well, it aims to provide investors with the dual benefit of exposure to Tezos’ performance while also generating that sweet passive income through ‘baking rewards’.

Understanding ‘Baking’ and Its Benefits

Now let’s get down to the nitty-gritty. Tezos operates on a proof-of-stake (PoS) model, which means that investors can earn passive income by staking their tokens. Yes, you heard that right—staking is like earning interest on your money, but cooler! By depositing their tokens, Tezos investors help maintain the network while reaping the rewards. Here’s how it works:

Investors can ‘delegate’ their tokens to a delegation service.
Once delegated, rewards are earned based on the total staking balance of that service.
These baking rewards are periodically paid out to the stakers.

This system not only incentivizes holding Tezos but also engages users in the governance process of the blockchain. Who knew being a part of the crypto world could be such a participatory experience?

Fee Structure and Asset Management

As with most investment products, there’s a catch. Amun will charge a 2.5% fee on the proceeds from the Amun Tezos ETP. While this might sound hefty, consider it a small price to pay for the opportunity to capitalize on the booming blockchain sector while chillaxing in your pajamas. Plus, all underlying assets are securely managed using Coinbase’s institutional-grade custody platform, ensuring a level of safety that many investors look for. Amun claims to hold 100% of these assets in cold storage, keeping them out of the hackers’ reach.

The Bigger Picture: Reshaping the Blockchain Sector

This recent listing isn’t just a solo act. Back in October, crypto broker Bitcoin Suisse teamed up with Amun to introduce a new Bitcoin and Ether-based ETP on the SIX exchange. With Amun now boasting a total of nine cryptocurrency ETPs listed on SIX, including XRP-based options, they’re definitely making ripples in the investment pool.

Staking’s Role in the Future of Crypto

According to a recent research report from Binance, the anticipated transition of Ethereum to a proof-of-stake model could significantly reshape the entire crypto landscape. Currently, the top 10 cryptocurrencies that support staking represent a staggering market capitalization of $25.8 billion. This sets the scene for staking dominance, which could account for about 10% of the total market cap in the crypto industry.

Conclusion: To Bake or Not to Bake?

So, should you dive into the AXTZ ETP? If you’re looking for a relatively hands-off investment with a side of passive income, this Tezos-based product might just tickle your fancy. Just remember, the world of cryptocurrencies is as volatile as a toddler after a sugar rush, so be sure to do your own research before diving in headfirst!