VanEck, one of the leading asset management companies, announced the successful activation of the staking feature for the Solana exchange-traded note (ETN) launched in the European market.
ETN, which has $73 million in assets under management (AUM), will now have staking rewards directly factored into token equity and reflected in the daily final value.
Founded in Liechtenstein, the Solana ETN is a digital exchange-traded product designed to track the price of Solana (SOL). Staking rewards will be accrued and reinvested daily, allowing them to be included in the end-of-day net asset value (NAV), explained Mathew Sigel, VanEck’s Head of Digital Asset Research.
“VanEck will manage staking risk using an in-house dynamic risk model to ensure daily liquidity, allowing us to efficiently cover daily redemptions,” Sigel said, noting that Solana’s shorter staking periods make it easier to implement compared to Ethereum ETPs, which have also offered staking for some time.
Sigel also noted that European regulations regarding staking features in exchange-traded products are more flexible than those in the United States, allowing the company to implement this functionality more efficiently.
When asked if VanEck was running its own validator node, Sigel explained that due to regulatory requirements in traditional finance (TradFi), asset managers are prohibited from holding client funds directly. This rule requires third-party segregation to protect client assets, and similar concerns apply when staking client funds.
To comply with these requirements, VanEck uses physical SOL held by the ETN to stake by instructing the custodian to delegate the SOL to a validator. While the validator node is operated by a staking provider, control of the delegated SOL remains with the custodian, ensuring that the assets are securely stored in cold storage.
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