New: Tezos & Polkadot now at Scalable Crypto

31 January 2022 | Scalable Capital

From now on, there is even more choice in Scalable Crypto: in addition to Bitcoin, Ethereum, Litecoin and Ripple, Tezos and Polkadot are now available.

The new crypto ETPs from our partner CoinShares are based on the ‘proof of stake’ mechanism. These coins hold a speciality: There are rewards for staking, which are passed on to investors both in the form of a reduction in the management fee to 0% p.a. and by means of a daily increasing coin entitlement:

ETP	Management fee	Staking rewards
CoinShares Physical Staked Polkadot	0% p.a.	5% p.a.
CoinShares Physical Staked Tezos	0% p.a.	3% p.a.

Explained: What is Staking?

Cryptocurrencies are decentralised due to their underlying blockchain technology. This means that there are no intermediaries such as banks or other financial institutions. However, in order to validate transactions, a ‘consensus mechanism’ is used.

Some cryptocurrencies, such as Bitcoin or Ethereum 1.0, use the consensus mechanism ‘proof of work’. For cryptocurrencies with many users or transactions, proof of work is not very efficient. This can lead to transactions being delayed and higher fees being charged.

The consensus mechanism ‘proof of stake’ removes these obstacles: it is faster and more efficient while charging lower fees. Creators can make their crypto holdings available to validate transactions on the network. Individual participants can thus contribute with their assets to the formation of a large pool and can get rewards for validating transactions. This process is called ‘staking’.

A random algorithm is used to build consensus in a blockchain network via ‘proof of stake’. The algorithm determines who has the right to mine the next block. Participants with a higher stake, i.e. with more assets in the pool, have a higher probability of being selected and receiving a reward.

Here's how trading Tezos and Polkadot works at Scalable

With Scalable Crypto, you invest in cryptocurrencies via ETPs. Hence, Tezos and Polkadot can be traded as easily as stocks or ETFs. ETPs can be traded on regulated exchanges such as gettex or Xetra during the usual trading hours.

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Scalable Capital

Digital wealth management & broker with flat rate

Scalable Capital is a leading fintech in Europe that brings people and technology-based investing together. Scalable Capital offers digital wealth management and a broker with a trading flat rate. In digital wealth management, the company creates and manages globally diversified ETF portfolios for its customers with, if desired, sustainable investment strategies. The broker enables customers to trade shares, ETFs, cryptocurrencies, funds and derivatives themselves and to conclude savings plans.

There are risks associated with investing. The value of your investment may fall or rise. Losses of the capital invested may occur. Past performance, simulations or forecasts are not a reliable indicator of future performance. Please refer to our risk information.