What is in-kind remap?
In traditional finance, "in-kind" refers to the transfer, payment, or settlement of assets in their original form rather than converting them into cash or another medium. It emphasises preserving the nature of the asset being exchanged. In ETF vocabulary, in-kind redemptions allows authorised participants to redeem shares in-kind rather than in cash.
BitDSM is an on-chain effort to allow BTC stakers create and redeem their stake "in-kind" and put it to use in Ethereum's playground, without minting another asset.
The table below outlines similarities between in-kind shares and in-kind remap.
Mechanism
Transfer of ETF shares for Native assets
Non-custodial redirection of asset control, aka, delegation
Tax implications
Avoid liquidations. Minimising tax event.
Remaps native bitcoin. Avoids conversion to a new asset
Redemptions
Orders redemptions via authorized participant
self-created/redeeemed. No intermediaries.
Applicability
ETF share redemption for underlying asset
Remap can be redeemed for underlying asset/stake
Counterparty Risk
Funds remain with custodian
Funds remain with custodian
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