Further clarification on the Ethereum Merge: transition to Proof-of-Stake (anticipated Thursday 15th September 2022)

Summary

Ethereum is undergoing a major upgrade which has been in the works for several years and is scheduled for completion in the coming days. This upgrade will change Ethereum’s consensus mechanism, which determines how transactions are reviewed and validated, from Proof of Work (PoW) to Proof of Stake (PoS).

Valour’s Ethereum Zero products (Valour Ethereum Zero SEK, ISIN: CH1104954362 and Valour Ethereum Zero EUR, ISIN: CH0585378752) enable investors to gain exposure to Ethereum (ETH) with zero management fees. The referenced asset under Valour’s certificate program will continue to track the underlying asset (ETH) of the upgraded Proof-of-Stake blockchain, known as the Beacon Chain. As such, investor holdings will not be affected and no action will be required of investors. Valour is continuing to work with its counterparties to maximise value for its shareholders in the event of any additional supported forks.

For Valour’s previous full statement on the Ethereum upgrade (the Merge), please see [here](https://valour.com/press/ethereum-upgrade-transition-to-proof-of-stake-anticipated-september-2022).

What to Expect

Impact on Valour’s Ethereum Zero Certificates
Following the transition from Proof-of-Work to Proof-of-Stake, the referenced asset of Valour’s existing Ethereum Zero certificates (ISINs below) will remain unchanged, continuing to track the native token of the upgraded Ethereum Beacon Chain blockchain:

Valour Ethereum Zero SEK, CH1104954362
Valour Ethereum Zero EUR, CH0585378752

No action will be required of current holders of Valour Ethereum Zero SEK and Valour Ethereum Zero EUR ETPs.

Trading
Provided that the transition goes ahead as scheduled, Valour does not anticipate any change to the live trading of its Ethereum Zero instruments. As such, continuous trading of both Valour Ethereum Zero SEK (CH1104954362) and Valour Ethereum Zero EUR (CH0585378752) can be expected, subject to the trading status of the underlying asset on the eligible crypto exchanges.

Forks
The Merge will see Ethereum continue as a single blockchain with its full transaction history remaining intact. Whilst this upgrade has been led by the Ethereum Foundation, the network’s distributed nature has resulted in differences of opinion, with some miners announcing their intentions to fork the network and split the chain in two, which would result in duplicated fund balances on the new chain. In such an event, Valour expects to receive (some) forked coins, with the allocation and access to said forked coins subject to the availability and support of Valour’s custodians. In light of this, Valour will work with its counterparties to maximise value for its shareholders in the event of any additional supported forks.  

Valour will update certificate investors with more information as things develop,, in line with respective Prospectus disclosures.

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