The staking mechanism employed is non-custodial, which means that the custodian retains full management over the staked property, and there’s no danger of lending. This improvement permits buyers to take part in Solana’s staking rewards by means of the ETN with out direct administration of the property.
🚨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
Non-Custodial Staking Model
VanEck’s non-custodial staking method ensures that the SOL (Solana tokens) used for staking are all the time managed by the custodian holding the ETN’s property. The technique minimizes dangers usually related to staking, corresponding to counterparty dangers which may come up if a 3rd get together good points management over the staked property.
Investors who maintain VanEck’s Solana ETN are robotically enrolled in staking, and any rewards generated will probably be included within the ETN’s token fairness. This signifies that buyers, no matter once they bought the ETN, will obtain staking rewards proportionally. However, these rewards will probably be topic to a 25% payment earlier than distribution.
Staking Process and Validator Delegation
The Solana tokens held inside the ETN are delegated to validator nodes as a part of the staking course of. While the validator nodes are operated by exterior staking service suppliers, the underlying SOL tokens stay absolutely managed by the custodian. This setup ensures that the tokens are usually not lent out or uncovered to extra dangers past the staking course of itself.
ETNs and Their Function
Exchange Traded Notes (ETNs) are monetary merchandise usually issued by establishments and designed to supply returns primarily based on the efficiency of a selected asset. In the case of the VanEck Solana ETN, the efficiency is tied to the worth of Solana, with staking rewards including a further potential return. ETNs, nevertheless, don’t contain direct possession of the underlying asset by buyers however as an alternative monitor the asset’s efficiency.
Investor Considerations
- Automatic Participation: Investors in VanEck’s Solana ETN are robotically included in staking actions, without having for direct motion. Rewards, if generated, are distributed proportionally throughout all holders.
- Control and Security: The non-custodial construction of the staking course of ensures that the SOL tokens stay underneath the management of the custodian always, lowering the dangers usually related to third-party involvement.
- Staking Fees: Investors must be conscious that staking rewards are topic to a 25% payment, which will probably be deducted earlier than the rewards are distributed.
