VanEck Europe’s exchange-traded note (ETN) for Solana underwent a key transformation Monday, offering Solana staking rewards for investors across the European Union.
Listed on the Euronext Amsterdam stock exchange in the Netherlands, the $74 million product will now accrue Solana rewards that are reinvested daily, the firm said. Dubbed the VanEck Solana ETN, the change represents a new form of passive income for the fund’s investors.
Every day, Solana staking rewards will be reflected in the ETN’s net asset value, VanEck said. As those rewards are reinvested, the payouts from delegated Solana will be reflected in an increased amount of SOL that each share accounts for, the asset manager added.
🚨VanEck EU Enables Staking for the $VSOL Solana ETP (AUM= $73M) 🚨
> Rewards Accrue & Re-Invested Daily
> Staking Rewards Included in End-of-day NAV Daily.
> VanEck to Manage Staking Exposure to Ensure Daily Liquidity@vaneck_eu
— matthew sigel, recovering CFA (@matthew_sigel) October 21, 2024
On staking rewards, VanEck said that it will charge investors a 25% fee. The decision follows a similar switch flipped in April, enabling exposure to Ethereum staking rewards on VanEck’s Ethereum ETN. In the United States, staking rewards for crypto ETFs haven’t yet been approved by the Securities and Exchange Commission (SEC).
When VanEck filed a registration statement for a spot Solana ETF in June, the firm made clear that staking would not be part of its product for American investors. Instead of leveraging the fund’s backing to earn rewards, the firm signaled that the “VanEck Solana Trust” would instead hold its Solana in reserve—mirroring spot Ethereum ETFs approved in the U.S. earlier this year.
Without offering investors the benefits of staking rewards, spot Ethereum ETFs have seen modest adoption since their launch in late July. Across a clutch of nine products, spot Ethereum ETFs have seen $140,000 worth of cumulative net outflows, according to CoinGlass data. As Grayscale’s spot Ethereum ETF has seen nearly $1 billion in outflows, hundreds of millions of dollars worth of allocations to other products have been largely overshadowed.
When it comes to digital asset inflows tracked by CoinShares, Solana has shined this year over other coins besides Bitcoin and Ethereum. Solana-based products have attracted $58 million worth of inflows in 2024, followed by Litecoin and XRP at $41 million and $26 million, respectively, per CoinShares.
While VanEck filed for its Solana product on the Cboe BZX Exchange first, 21Shares followed suit with its own filing involving the exchange a day later. And last week, the asset manager Grayscale filed to convert a multi-asset fund into an ETF on the New York Stock Exchange, which features Solana exposure alongside Bitcoin, Ethereum, and Avalanche.
Following August’s approval of a spot Solana ETF in Brazil, VanEck’s Head of Digital Assets Research, Matthew Sigel, told Decrypt that a similar development was “inevitable” in the U.S. At the same time, analysts have pointed to the U.S. presidential election as a major factor.
Sigel told Decrypt in a statement Monday that the EU’s approach to ETNs provides asset managers with more flexibility compared to the U.S. The region’s liquidity requirements, for example, give VanEck “more room to manage redemptions effectively,” he said.
If former president Donald Trump wins the White House in November, anything is possible, according to Bloomberg ETF analyst Eric Balchunas. On Twitter (aka X), he said the election—and the prospect of a crypto friendly-regime under Trump—is just as relevant as a final deadline for VanEck and 21Shares’ applications coming next year in mid-March.
Edited by Andrew Hayward
