Welcome, great ninjas
In this article, I will share with you one of the important topics that embodies Injective’s dedication and innovative capabilities in decentralized finance.
AINJ: The Injective Staking ETP
Let’s go brothers
Injective is pleased to introduce AINJ, the Injective Staking Exchange-Traded Product (ETP) developed by 21Shares.
This innovative product enables users to gain exposure to INJ through major traditional financial exchange venues and brokerages while also earning staking rewards.
AINJ marks a significant advancement in Injective’s efforts to integrate with traditional markets and institutions.
AINJ is offered by 21Shares, a leading issuer of crypto ETPs.
With a proven history of collaborating with major crypto projects, 21Shares has consistently introduced innovative financial products and promoted increased institutional participation in the digital asset sector.
Recently, 21Shares has been at the forefront of efforts to launch a Bitcoin ETF ( which is a financial instrument that gives investors exposure to the price of Bitcoin without having to purchase the digital currency directly. These funds trade on traditional exchanges like stocks, providing a simplified and regulated way to invest in Bitcoin) in partnership with Cathie Wood’s Ark Invest, managing over $3 billion in assets for this product alone.
Their expertise and reputation guarantee that AINJ is supported by a dependable and well-established partner.
For more knowledge:
▪️Ark Invest is an investment management firm founded by Cathie Wood in 2014. The firm focuses on investing in disruptive innovations in public markets, such as robotics, big data, artificial intelligence, and genomics.
▪️Cathy Wood is an American investor and the founder, CEO, and Chief Investment Officer of Ark Invest. Born in Los Angeles in 1955, she graduated cum laude from the University of Southern California with a bachelor’s degree in finance and economics. Prior to founding Ark Invest, Kathy served in several senior positions at various investment firms.
The launch of AINJ represents a major milestone for institutional adoption, creating new avenues for large-scale entities to interact with Injective. This regulated and transparent product facilitates institutional involvement and is already endorsed by some of the world’s foremost traditional finance exchanges and brokerages, including Interactive Brokers, Saxo Bank, Swissquote, and eToro.
I will tell you about these institutions in detail
▪️Interactive Brokers is a multinational brokerage company headquartered in Greenwich, Connecticut, United States. It was founded in 1977 and is considered one of the largest electronic trading platforms in the United States in terms of the number of daily trades. The company provides comprehensive trading services including stocks, options, futures, currencies, bonds, gold, and digital currencies.
▪️Saxo Bank is a Danish investment bank specializing in online trading and investing. It was founded in 1992 and offers a wide range of financial products including trading in stocks, bonds, forex, futures, and options. The bank is distinguished by advanced and easy-to-use trading platforms, and is considered among the best banks in the field of foreign exchange trading in the world.
▪️Swissquote is a Swiss investment bank founded in 1996. The bank offers comprehensive trading and investment services including stocks, bonds, forex, and futures. Swissquote is the first electronic bank in Switzerland and is considered one of the pioneers in providing digital banking services. The bank is highly transparent and offers a wide range of financial products to clients around the world.
▪️eToro is a social investing and multi-asset brokerage founded in 2007. The eToro platform offers manual and social trading, and allows users to automatically copy other investors' trades. The company has offices in several countries around the world including the United States, the United Kingdom, Israel, Cyprus, and Australia. eToro offers a variety of financial assets including stocks, cryptocurrencies, commodities, and forex.
Globally, only a limited number of crypto assets have one or more associated ETPs. This exclusive group highlights the significance and innovation of AINJ, as it joins a distinguished list of offerings that provide both institutional and retail participants with access to the rapidly growing digital asset ecosystem.
What is an ETP ?
Exchange Traded Products (ETPs) are a category of financial instruments listed on stock exchanges, offering exposure to a variety of underlying assets without requiring direct ownership. These assets can include stocks, bonds, commodities, and cryptocurrencies. ETPs provide a convenient method to engage in a diversified portfolio, merging the simplicity of stock trading with the advantages of mutual funds.
Types of ETPs :
▪️ETFs (Exchange Traded Funds)
These funds replicate the performance of a specific index, sector, or commodity, aiming to mirror the returns of the underlying assets they represent.
▪️ETCs (Exchange Traded Commodities)
These products offer direct exposure to commodity prices, tracking either individual commodities like gold or a diversified basket of commodities.
Advantages of ETPs
- Diversification: ETPs offer exposure to a wide array of assets, mitigating risk across different sectors and asset classes.
- Liquidity: ETPs are traded on stock exchanges and can be bought and sold throughout the trading day at prevailing market prices, ensuring high liquidity.
- Transparency: ETPs typically reveal their holdings daily, providing clear insights into the underlying assets and maintaining transparency.
- Cost Efficiency: ETPs generally have lower expense ratios compared to mutual funds, attributed to their passive management structure.
Structures of ETPs
- Physical ETPs: These ETPs hold the actual underlying assets they track, ensuring a direct correlation with the asset and minimizing counterparty risk. However, this structure may incur higher operational expenses due to the costs associated with physical storage and may face liquidity challenges.
In the context of blockchain, these disadvantages are less pronounced due to the nature of digital assets. For instance, AINJ is a physically backed ETP.
- Synthetic ETPs: These ETPs utilize financial derivatives (e.g., swaps, futures) to replicate the performance of underlying assets. This approach is generally more cost-effective and provides access to otherwise hard-to-trade assets. The trade-off includes increased counterparty default risk and added complexity due to the use of derivatives, which can diminish transparency.
Let’s take a look at how AINJ works
Offered by 21Shares, AINJ provides a distinctive method to gain exposure to INJ within a regulated framework. By merging the advantages of staking with the convenience and efficiency of an ETP, AINJ serves as a comprehensive and dynamic tool for benchmarking INJ.
- Staking Yields: AINJ captures the staking yields generated by staking INJ to secure the Injective network. These rewards are then reinvested into the ETP.
- 100% Physically-Backed: AINJ is structured as a Physical ETP, fully backed by the underlying INJ and stored in cold storage by an institutional-grade custodian. The low storage costs of digital assets enable AINJ to offer a direct correlation to its underlying asset without increased operational expenses.
- Regulated and Transparent: AINJ operates within a regulated framework, ensuring all transactions and holdings are transparent and accessible.
- Convenience and Efficiency: Trading AINJ on stock exchanges allows for easy buying and selling throughout the trading day. This flexibility provides a convenient and efficient way to gain exposure to INJ and its associated staking rewards without the complexities of directly managing staking processes.
- Accessibility: AINJ is supported by 25 different banks and brokerages, and is traded on both Euronext Amsterdam (AINJ NA) and Euronext Paris (AINJ FP).
Notable Banks and Brokerages Supporting AINJ
- Interactive Brokers (IBKR): With a client base of approximately 2.5 million spanning 200 countries and territories, IBKR oversees assets exceeding $370 billion and facilitates trading on 150 exchanges.
- Saxo Bank: Catering to over 1 million retail and institutional clients, Saxo Bank operates globally, offering trading in over 40,000 financial instruments across various asset classes, and supports over 200 banks and 400 financial intermediaries.
- Swissquote: As a premier Swiss online bank, Swissquote manages assets worth over CHF 50 billion (~$55 billion), serves more than 570,000 clients, and provides access to over 3 million different products.
- eToro: With a user base surpassing 30 million across more than 100 countries, eToro manages billions in assets and is renowned for its social trading features.
Finally, we can say that AINJ marks a pivotal advancement in enhancing access to the performance and staking rewards of INJ, the native asset of the Injective ecosystem. By harnessing the advantages of both physical backing and staking yields, AINJ presents a distinctive opportunity within a regulated and transparent framework. Endorsed by some of the largest banks and brokerages, AINJ epitomizes Injective’s dedication to bridging traditional financial markets with the innovative potential of decentralized finance.
Discover AINJ today to experience the cutting-edge benefits of the Injective Staking ETP.
