Institutional On-Ramp Opens as 21Shares Brings DeFi Derivatives to Regulated Markets

21Shares, a leading provider of digital asset investment products, has launched the first Exchange-Traded Product (ETP) tracking the native token of decentralized exchange platform dYdX. The ETP, listed on Swiss exchange SIX, offers institutional and accredited investors exposure to the dYdX token (DYDX), marking a potential milestone in bridging traditional finance with decentralized finance (DeFi) derivatives.

The product is structured as a physically backed ETP, meaning it holds the underlying DYDX tokens rather than derivatives or synthetic exposure. This approach aligns with the growing demand for transparency and direct ownership among institutional investors entering the crypto space. The launch is seen as a strategic move to facilitate broader adoption of DeFi instruments, particularly as regulatory clarity improves in select jurisdictions.

dYdX, a decentralized perpetual trading platform, has seen significant growth in trading volume and user activity over the past year. The platform, which transitioned from an Ethereum-based order book to a layer-2 solution, has attracted attention for its low fees and high performance. The ETP's introduction is expected to enhance liquidity for the DYDX token and provide a regulated vehicle for investors to gain exposure to the DeFi derivatives market.

21Shares’ ETP follows a series of product expansions into the DeFi space, including offerings tied to Uniswap and Aave. The company has emphasized its commitment to compliance and institutional-grade custody solutions, which are critical for attracting larger investors. The ETP’s listing on a regulated exchange further reinforces its appeal to institutions seeking secure, transparent, and liquid investment avenues in the fast-evolving crypto market.

Analysts suggest that the ETP may serve as a gateway for institutional capital into DeFi derivatives, a segment that has previously been dominated by retail investors and unregulated platforms. While the product is currently available in Europe, there are indications that 21Shares is exploring potential listings in other jurisdictions, including China Hong Kong, subject to regulatory approvals.

The launch comes at a time when the crypto industry is undergoing a phase of increased regulatory scrutiny and standardization, particularly in major financial centers. With the ETP offering a transparent and regulated route into DeFi, it could set a precedent for future products targeting other decentralized finance protocols.