Hi @RLX
As you said, being physically-backed (or fully collateralised with a diversified collateral) help mitigating the counterpart risk.
Because I see you like going into details, this chart will show you how GraniteShares ETP are done.
Collateralised ETP Securities are backed with collateral, subject to eligibility criteria, to protect investors in event of default. The amount of collateral posted by the Swap Counterparty is held and valued by an independent custodian in a segregated account and is adjusted daily and reflects the collateralised ETPs’ change in value and in the outstanding number of securities. The Bank of New York Mellon SA/NV serves as the Swap Collateral Custodian.
