- VanEck’s Solana ETN in Europe offers automated staking rewards with cold storage protection for SOL investors.
- The staking program provides security by keeping staked SOL in cold storage, while investors benefit from daily staking rewards.
In a recent CNF update, VanEck has enhanced its Solana ETN in Europe by incorporating an automated staking feature, simplifying how investors earn and receive staking rewards. According to Matthew Sigel, the head of Digital Assets Research at VanEck, this move aligns with Solana’s growing decentralization and its status as a commodity.
Investors are automatically enrolled in the staking program upon purchasing the ETN, with rewards calculated daily after deducting a 25% staking fee. As detailed in the marketing communication introducing SOL staking, VanEck highlighted that:
The Solana network uses a Delegated-Proof-of-Stake consensus mechanism (DPoS) as opposed to Ethereum’s Proof-of-Stake (PoS). Every validator on the network has an opportunity to participate in consensus by casting votes for which blocks they believe should be added to the blockchain, thereby confirming any valid transactions contained in those blocks.
Sigel noted that the ETN’s non-custodial approach leverages the physical SOL held by the ETN for staking. The custodian delegates the SOL to a validator managed by a staking provider, ensuring that control over the staked tokens remains with the custodian in cold storage, thus minimizing third-party risks. This setup provides added security for investors while still allowing them to benefit from staking activities.
Liquidity and Risk Management for Solana ETN
Addressing questions about liquidity, Sigel explained VanEck’s dynamic risk model, which ensures they can meet daily redemptions efficiently. Solana’s shorter staking epochs make liquidity management simpler compared to their Ethereum ETP.
The system also allows for the daily accrual and reinvestment of staking rewards, which are reflected in the ETN’s Net Asset Value (NAV) by the end of each day. This transparent process provides investors with clear and stable returns.
In addition to its European offerings, VanEck is expanding its presence in the crypto market. The firm has recently applied to launch the first Solana ETF in the U.S., further underscoring its commitment to integrating digital assets into its portfolio.
Reiterating the latest update in the CNF post, VanEck stated that Solana could reach 50% of Ethereum’s market cap by dominating DeFi and payments. According to CoinMarketCap, Solana (SOL) is currently trading at $164.32, with a decrease of 2.90% in the past day and a 4.54% increase over the past week.