Stage of entry: it refers to how carefully an investor can work together with or from a digital asset in its purest kind (on-chain). The extra off-chain layers or wrappers round an asset, the much less stage of entry. For instance, the spot bitcoin ETF is a conventional (offchain) monetary product backed 1:1 by bitcoins saved in a certified custodian. Being cash-redeemable solely, buyers can’t redeem their shares for precise bitcoin, however they need to liquidate them for money. On the opposite finish of the spectrum, self-custody is the purest, most direct entry to the on-chain asset, with on the spot settlement and with the flexibility to do issues with that asset instantly – be it transferring, swapping, staking, lending, or borrowing in opposition to it – with out the necessity for proxies or further settlement layers.
