TLDR
- VanEck may stake up to 70% of AVAX in its proposed Avalanche ETF.
- Coinbase Crypto Services will serve as the fund’s initial staking provider.
- Staking rewards will be allocated to the fund after deducting a 4% fee, and the NAV will be adjusted accordingly.
- The ETF will be custodied with Anchorage Digital and Coinbase Custody.
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VanEck has taken a new step in crypto-backed ETFs by updating its proposed Avalanche fund, VAVX, to include staking rewards. This move would allow the fund to generate income by staking up to 70% of its AVAX holdings. If approved by the SEC, VAVX would be one of the first U.S.-listed ETFs to combine spot crypto exposure with native token staking yield, reflecting the evolving design of digital asset investment products.
VanEck Plans to Stake Up to 70% of AVAX Holdings
In its amended S-1 filing with the U.S. Securities and Exchange Commission, VanEck disclosed that the VAVX fund may stake as much as 70% of its AVAX tokens. The goal is to generate staking rewards that would accumulate to the fund, minus a 4% service fee paid to its staking provider, Coinbase Crypto Services.
The rewards will be reflected in the ETF’s net asset value, providing investors with potential yield in addition to AVAX price exposure. This marks a shift in ETF design, as it incorporates the on-chain features of proof-of-stake networks into traditional investment vehicles.
Custody and Index Strategy Emphasize Security and Transparency
VanEck will custody the fund’s AVAX holdings with regulated providers, including Anchorage Digital and Coinbase Custody. Both custodians store crypto assets offline in cold wallets, offering secure handling of digital assets under regulatory oversight.
The fund will not use leverage or derivatives. Instead, it will track the price of AVAX through the MarketVector Avalanche Benchmark Rate, a custom index built from pricing data on major exchanges. This ensures a reliable price reference for the ETF while maintaining direct exposure to the token’s spot value.
By avoiding derivatives, the fund seeks to simplify its structure and align with SEC expectations for physically backed crypto ETFs. The inclusion of staking adds a yield component without introducing additional market risk.
VAVX to Trade on Nasdaq Pending Regulatory Approval
If approved, VanEck’s Avalanche ETF will trade under the ticker VAVX on the Nasdaq exchange. The product aims to offer investors a combination of capital appreciation and staking yield, packaged in a familiar ETF format.
VanEck is not alone in exploring this model. Bitwise recently updated its own spot Avalanche ETF filing to include staking. These filings signal a broader trend toward integrating blockchain-native features into regulated investment products.
The introduction of staking into ETF design could set a precedent for other funds tracking proof-of-stake assets. If approved, the VAVX fund may open the door for similar offerings tied to networks like Solana, Polkadot, and Ethereum—where staking is a core part of token economics.
VanEck’s filing represents an effort to meet investor demand for both passive exposure and yield generation within the crypto asset class. The SEC’s response to this proposal will likely shape how staking is integrated into future ETF products in the U.S. market.
