May 21, 2025
Dear Secretary, Securities and Exchange Commission, I am writing to express my strong support for the proposed rule change to list and trade shares of the Canary Funds Litecoin Trust (File Number SR-NASDAQ-2025-005). The approval of a spot Litecoin Exchange Traded Fund (ETF) is a timely development that would provide American investors with a regulated, accessible, and secure avenue to gain exposure to Litecoin (LTC). I wish to direct the Commission's attention to a specific and crucial element inherent to Litecoin's design – merged mining – which stands as a major point of distinction from Bitcoin's security model. In 2014, Litecoin's mining community demonstrated a collaborative spirit by integrating Dogecoin into its mining network through auxiliary proof-of-work (auxpow). This contrasts with the Bitcoin miner division in 2017 that led to the creation of Bitcoin Cash, a significant development in Bitcoin's history. In the years leading up the merge, Litecoin's hash rate increased significantly compared to Dogecoins. Rather than allowing Dogecoin's blockchain to become vulnerable to a 51% attack, Dogecoin's miners adopted auxpow and saved chain, preserving the energy invested in Dogecoin's validation. For a complete history of the merge event, please see "How Litecoin and Dogecoin Created One of the Most Robust PoW Network's". The mining relationship between Bitcoin (BTC) and Bitcoin Cash (BCH) presents a competitive dynamic within the SHA-256 mining ecosystem. These two chains compete for the same pool of miners, potentially posing a risk to Bitcoin's network security should BCH experience a significant increase in value and hash rate. This competition stands in contrast to the cooperative nature of the Scrypt mining ecosystem. Historically, cryptocurrency miners may have been driven by peer-to-peer or anti-establishment ideals alongside profit. However, contemporary mining operations are largely accountable to boards and shareholders, whose primary focus is often short-term profitability. A significant, and perhaps underappreciated, difference between Litecoin and Bitcoin is the ease with which Bitcoin mining firms can redirect their resources to a competing SHA-256 chain like BCH. If ever it became more profitable to mine BCH, even for a short period, it would be trivial for a Bitcoin miner to switch their mining pool address; for example from stratum+tcp://btc.f2pool.com:1314 for BTC to stratum+tcp://b4c.f2pool.com:1228 for BCH. Litecoin's long-standing merged mining model fosters a cooperative Scrypt ecosystem, unlike the competition in SHA-256. As the parent chain, Litecoin's robust hash rate forms a foundational security layer for child chains like Dogecoin and Bellscoin via auxpow. Attackers targeting these child chains must overcome not only their dedicated hash rate but also Litecoin's. Thus, Litecoin acts as a key security provider within this ecosystem, its established network underpinning the integrity and resilience of its merged-mined counterparts. This inherent security, stemming from Litecoin's strength and the cooperative nature of merged mining, is a crucial differentiator. Every DOGE, BELLS, PEP miner would point to their miner to a Litecoin pool, for example via stratum+tcp://ltc.f2pool.com:3335. There simply isn't, nor will there ever be, a more profitable chain to point a Scrypt miner to. Advantages of Merged Mining: Incentivizes Miner Participation: The potential for increased rewards from multiple blockchains can attract more miners, further strengthening the security of all participating networks. Scrypt miners have demonstrated higher profitability per watt compared to SHA-256 miners, further incentivizing participation and strengthening the Litecoin network's robustness through increased hash rate. Enhanced Economic Security Against 51% Attacks: The substantially larger hash rate required to compromise the merged-mined Litecoin network makes 51% attacks economically prohibitive and practically infeasible. In recent years, Dogecoin's rise in popularity bolstered Litecoin's security. This security is now also being shared with BELLS, PEP, et al. Reduced Energy Consumption (in aggregate): Instead of requiring separate mining infrastructure for each blockchain, merged mining allows the same computational power to secure multiple networks, leading to a more efficient use of energy across the crypto ecosystem. Bootstrapping New Blockchains: Merged mining provides a mechanism for new cryptocurrencies to gain initial security by piggybacking on Litecoin's mining infrastructure. Facilitating Safe Test Environments: Merged mining provides a valuable environments for testing potentially risky upgrades like OP_CAT (which is being tested on Bellscoin right now), before larger blockchains like Litecoin consider implementation. This cautious approach minimizes risk for established cryptocurrencies. Litecoin's inherent merged mining mechanism strongly deters network manipulation, directly addressing the Commission's concerns about fraudulent and manipulative practices. This design ensures LTC's robust security and resistance to attacks that could compromise blockchain integrity. Mining isn't about profit, it is about keeping the blockchain safe. The approval of Bitcoin ETFs has established a precedent for integrating digital assets into regulated markets, offering investor protection and transparency. Litecoin, with its established history, strong security bolstered by merged mining, and significant market presence, is a logical next step. Its unique security profile makes it THE leading Scrypt-based digital asset, mitigating manipulation risks present in less secure blockchains. Litecoin's nickname, Chikun, is quite fitting if you think of all the eggs it has laid. Dogecoin was only just the beginning! I urge the Commission to prioritize these significant security advantages when evaluating SR-NASDAQ-2025-005. Approving this Litecoin ETF would recognize the network's superior robustness and provide investors with a valuable diversification tool within a regulated framework. Thank you for considering my comments. Sincerely, ANML