There are 11 financial institutions that issued spot Bitcoin ETFs in January 2024, only two — Bitwise and VanEck — have pledged to donate a percentage of their profits to open-source Bitcoin development.
The question that really matters is not whether ETF sponsors harass large investors for their funding of core development, but why? @BitwiseInvest You can also find out more about the following: @vaneck_us Doing so? Bitcoin has been an ongoing project for many years and its core developers continue to receive inadequate funding.
— nic "bankful" carter (@nic__carter) April 10, 2024
When you look at the rationale behind Bitwise and VanEck’s decision to make a donation to developers responsible for maintaining and updating the Bitcoin protocol it is difficult to see why other spot Bitcoin ETF issuers don’t follow suit.
“While we use the language of ‘donation’ when we support devs, I think in reality it’s closer to a self-investment into making the asset itself stronger,” Hong Kim, the co-founder and CEO of Bitwise wrote an article in which he explains his thoughts. AMA thread on Stacker News. “Many people think Bitcoin just magically gets maintained, but that’s not true! If you manage a large pool of Bitcoin and you take fees for doing so, then why would you not reinvest some of that into the underlying infrastructure?”
Bitwise issued the spot Bitcoin ETF as a result of this. Bitwise Bitcoin ETF (ticker: BITB), committed to donating 10% of its ETF fee profits to three different nonprofits that fund Bitcoin Core developers — OpenSats, Brink Then, there is the Human Rights Foundation (HRF) — for 10 years.
“Brink, OpenSats and HRF were the most established nonprofits with a track record of funding Bitcoin devs — they had the proof of work, so to speak,” Kim spoke to Bitcoin Magazine.
VanEck has issued its Bitcoin ETF spot under the name VanEck Bitcoin Trust It also believes in the importance of supporting Bitcoin Core. It has therefore promised to make an additional contribution of 5% to Brink and a corresponding contribution to HODL. initial $10,000 donation The organization.
“We believe TradFi stands to gain from the efforts of Bitcoin’s Core contributors,” Bitcoin Magazine spoke with Matthew Sigel of VanEck’s Digital Asset Research.
“As we stand to profit from Bitcoin’s price increase, it makes sense that we also give back to the work of the innovators who make the chain possible,” he said.
Given that it’s only sensible for spot Bitcoin ETF issuers to give back Bitcoin Core developers — those who support and further the underlying asset for their financial product — which will be next To follow Bitwise and VanEck’s lead?
Bitcoin is a new currency that has been developed to be open source.source These major improvements could be used to scale up the protocol. financial Institutions donating even just a tiny portion of their Bitcoin spot ETF fees.
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Source: bitcoinmagazine.com