VanEck Launches Staking for Solana ETN in Europe Enhancing Investor Opportunities

VanEck Launches Staking for Solana ETN in Europe Enhancing Investor Opportunities

VanEck has officially announced the launch of staking for its Solana exchange-traded note (ETN) on October 21 marking a significant development for investors in the European market. The Solana ETN which currently boasts an asset management scale of $73 million will allow investors to earn staking rewards that will be automatically incorporated into the product's token equity and reflected in its daily terminal value.

The staking feature is based on Solana’s Delegated-Proof-of-Stake (DPoS) mechanism which relies on validators to maintain and secure the network. Matthew Sigel who serves as VanEck’s Head of Digital Assets Research shared this update via X emphasizing the convenience and benefits this feature brings to investors. The rewards generated from staking will directly affect the product’s daily net asset value (NAV) allowing investors to reap the benefits without needing to engage in any additional management.

Validators play a crucial role in the staking process as they are responsible for processing transactions creating new blocks and earning rewards based on the amount of Solana (SOL) delegated to them by users known as delegators. In return for their contributions to network security delegators earn passive rewards.

VanEck has adopted a non-custodial approach to staking ensuring that assets remain under the complete control of the custodian thereby eliminating any lending risks. This means investors do not have to take any action to benefit from staking as rewards will be automatically accounted for within the ETN's coin entitlement. Notably all investors regardless of when they acquired the ETN will receive staking rewards equally and these rewards will be added daily to the product's NAV reflecting any gains derived from staking activities.

However it is important to note that VanEck will deduct a 25% staking fee from the rewards before distribution. The adjusted rewards will be included in VSOL's end-of-day NAV calculated by 4 p.m. CET. Currently this staking functionality is exclusive to European users.

Despite the introduction of staking the ETN remains fully redeemable allowing investors to buy and sell it on a daily basis similar to other exchange-traded products. VanEck’s Solana Exchange-Traded Note VSOL is incorporated in Liechtenstein and is fully collateralized and securely stored with a regulated crypto custodian. Launched in September 2021 VSOL is traded on Deutsche Börse Europe’s leading stock exchange.

As of October 18 2024 VSOL has reported total assets under management of $73.8 million with a share price of €8.229 or approximately $8.93. VanEck is recognized as a prominent digital asset manager globally including in the United States where it offers exchange-traded funds (ETFs) linked to Bitcoin and Ethereum.

Additionally VanEck is working on launching a similar product for Solana and was the first asset manager to submit a Solana ETF application to the SEC. However the SEC has yet to make a decision regarding VanEck’s ETF application and experts including Bloomberg’s ETF analyst Eric Balchunas suggest that approval for a Solana ETF may not come until there is a shift in the government.