The crypto sector has exploded in the last year, after COVID-19 pandemic started to spread — even more so than back in 2017, which was a year known for record growth in interest and funds that went into crypto. With crypto outperforming every other asset, this may have been the nudge that institutional investors needed to join the crypto industry. Many of them did just that, and as a result of their interest, North America got three ETFs as of yet, and Latin America got one.
All three North American ETFs are in Canada, while the South American ETF emerged in Brazil. In the US, there is massive pressure on the US SEC, with numerous companies submitting their own ETF proposals and requesting review and green light to launch them. Still, with new exchange-traded products, investors might need a new place to reach them and invest, which is where Plethori Platform comes in.
Plethori is a crypto ETF investment platform that allows open trading, and even the creation of ETFs, It does this by using blockchain technology — the underlying tech that makes cryptocurrency trading and transactions possible. On top of that, Plethori also utilizes Ethereum Layer 2 solutions. The platform will offer decentralized cross-chain investment for ETFs built on Ethereum and Polkadot chains, according to its recent announcement.
As such, the platform and its protocol have successfully expanded and created a bridge between crypto and traditional finance. They will also help interoperability take the next step and provide its service cross-chain. It will even allow investments into entire sectors in cryptocurrency industry, such as oracles, NFTs, insurance, derivatives, Polkadot Ecosystem Projects, and more.
Why is there such a demand for ETFs?
- ETFs are a unique investment vehicle that offer a multitude of benefits to investors. They have become so popular due to their simplified and relatively secure nature. A low risk, cheap and diversified portfolio is what many investors aim for - to be able to achieve that so quickly and simply is bound to spark interest.
What advantages do they offer?
ETFs offer several advantages:
1. Lower fees - investing in multiple assets with a single transaction fee means that investors have more capital to invest.
2. Instant diversification - risk is spread between multiple projects rather than just one.
3. The ability to invest in a whole industry or sector. This is of particular interest within the cryptocurrency arena due to the strong trends that develop (ie. NFTs, Oracles, etc) and the high volatility.
4. Tax benefits - Unlike all other forms of investment, taxes are not paid on ETFs until the time of realisation. This provides the investor with a degree of control over when they have to pay tax on their investment.
What will it take for the SEC to finally approve a Bitcoin ETF?
Now that Gary Gensler has been appointed chairman of the SEC we could be closer to a bitcoin ETF than previously thought. The issue is that the SEC are pro regulation, and cryptocurrency is of course decentralized and outside of their control - the fluctuations and potential illegalities connected to crypto have meant that application after application for a bitcoin ETF have been denied.
How does Plethori plan to disrupt the money market?
In the same way that all solid DeFi projects disrupt the money market - the provision of a trustless investment structure, built and functioning upon the decentralized, immutable and transparent entity that is blockchain technology, must by its mere existence disrupt the centralized financial market structure.
What will investors be able to do on your platform?
Our V1 platform will provide investors with the ability to trade a wide range of available ETFs. It will have the appearance and all the features of any top tier exchange platform, however the tradeable markets will be our range of ETFs.
Users will be able to place market orders, limit orders, stop losses, view their trade history and wallet/portfolio and also make trades using leverage.
What will the V2 platform bring upon launch?
Our V2 private investment platform will have all the same functionalities as our V1 platform, with the added feature of the ability for users to create their own custom built ETF.
Leader boards will display the highest ranking ETFs and fund managers, and our ERC721 integration will reward fund managers with NFTs for achieving milestones.
The announcement mentioned a built-in mechanism that allows fund creators to earn. How will that work?
As mentioned above, Plethori’s V2 platform provides the ability to create one’s own custom designed ETF. These user-built ETFs will then become a tradeable option for other platform users. Each time an ETF is bought or sold, a percentage of the transaction fee will be distributed to the ETF creator.
Users will also receive NFTs for achieving certain milestones within the platform.
What will the Layer 2 integration enable?
Plethori will be launching on Ethereum Layer 2 - Optimism - which offers all the security and scalability of Ethereum mainnet but with much faster transaction times and at a fraction of the cost in fees. Uniswap V3 will also be using Optimism.
Do you expect ETFs to be the next major crypto trend?
With the increasing prevalence of traditional investment structures within crypto’s decentralized landscape there is every chance that the next big trend will encompass ETFs. This type of investment vehicle is in such high demand for a number of reasons - low entry costs and instant diversification being two of the main attractions to investors.