Stage of entry: it refers to how carefully an investor can work together with or from a digital asset in its purest type (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 standard (offchain) monetary product backed 1:1 by bitcoins saved in a professional custodian. Being cash-redeemable solely, buyers can’t redeem their shares for precise bitcoin, however they have 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 instantaneous settlement and with the flexibility to do issues with that asset immediately – be it transferring, swapping, staking, lending, or borrowing towards it – with out the necessity for proxies or extra settlement layers.
