Crypto's First ETF: LCAP Token Merges Blockchain Speed with Institutional Trust

Reserve and CF Benchmarks have launched the Large Cap Index DTF (LCAP), a groundbreaking onchain index token representing the first licensed institutional-grade product to track over 90% of the cryptocurrency market cap. The token, available for trading on Kraken, combines a diversified basket of ten large-cap cryptocurrencies—including Bitcoin (BTC), Ether (ETH), and XRP—with a structure backed 1:1 by assets held in smart contracts. LCAP is rebalanced quarterly and redeemable for its underlying components, ensuring alignment with the CF Benchmarks Large Cap Index (Diversified Weight). This innovation aims to bridge traditional investment simplicity with blockchain efficiency, offering both retail and institutional investors a regulated, transparent, and liquid vehicle for broad crypto exposure.

The partnership leverages CF Benchmarks’ UK FCA-regulated index expertise and Kraken’s global trading infrastructure. CF Benchmarks’ indices already underpin six of the 11 U.S. spot Bitcoin ETFs and 99% of regulated crypto derivatives markets. Kraken, one of the world’s largest exchanges, facilitates LCAP trading with its advanced execution capabilities, while MEV Capital provides institutional-grade scale and execution support. Thomas Mattimore of ABC Labs, a Reserve ecosystem contributor, emphasized that LCAP democratizes access to a diversified index product “that looks and feels like an ETF but with the speed and availability of crypto”.

LCAP’s structure differs from synthetic index tokens by anchoring its value to tangible assets. The token’s quarterly rebalancing ensures alignment with market trends, and its redeemability for underlying assets reinforces trust. Sui Chung of CF Benchmarks described the launch as a “major milestone in crypto financial innovation,” highlighting the convergence of tokenization and benchmarking to simplify market access. Reserve, which oversees over $500 million in total value locked (TVL) across its index and yield DTFs, aims to expand decentralized finance by enabling users to earn onchain yields denominated in ETH and USDC.

The collaboration underscores growing alignment between regulated benchmarks and tokenized products. CF Benchmarks’ indices, referenced by over $125 billion in assets, now extend to tokenized vehicles like LCAP, reflecting broader adoption of blockchain-native financial tools. Kraken’s role as a launch partner highlights its commitment to bridging traditional and crypto markets, with its platform supporting 450+ digital assets and 6 currencies. Analysts note that LCAP’s ETF-like simplicity could accelerate institutional adoption of crypto indices, particularly as regulatory clarity expands.

Reserve’s mission to create accessible financial systems through decentralized index technology is further advanced by LCAP. By tokenizing diversified portfolios, the platform aims to combat inflation and broaden access to financial tools, mirroring the democratizing impact of ETFs in traditional markets. CF Benchmarks’ methodologies, audited by KPMG and compliant with UK BMR, add credibility to LCAP’s benchmarking framework. The launch positions crypto markets to mirror the efficiency and transparency of equity indices while leveraging blockchain’s inherent advantages.

[1] Reserve and CF Benchmarks Partner on First Index Token (https://www.newswire.ca/news-releases/reserve-and-cf-benchmarks-partner-on-first-index-token-tracking-over-90-of-crypto-market-cap-867301768.html)

[2] Reserve & CF Benchmarks Launch $LCAP (https://cryptonews.com/news/reserve-cf-benchmarks-launch-lcap-first-licensed-crypto-index-token-on-kraken/)

[3] Reserve & CF Benchmarks Launch $LCAP, First Licensed Crypto Index Token on Kraken (https://cryptorank.io/news/feed/f0c06-reserve-cf-benchmarks-launch-lcap-first-licensed-crypto-index-token-on-kraken)

[4] CF Benchmarks (https://www.cfbenchmarks.com/)

[5] Reserve and CF Benchmarks Launch Breakthrough Index Token (https://third-news.com/article/83b8a262-995b-11f0-bdbe-9ca3ba0a67df)

[6] Reserve and CF Benchmarks Partner on First Index Token, Tracking Over 90% of Crypto Market Cap (https://coinpaper.com/11262/reserve-and-cf-benchmarks-partner-on-first-index-token-tracking-over-90-of-crypto-market-cap)

[7] Reserve cuts through the noise of crypto with their indices (https://www.thestreet.com/crypto/innovation/reserve-cuts-through-the-noise-of-crypto-with-their-indices)