VanEck Amends Avalanche ETF: Staking Yields, 0.30% Fee, and Liquid Staking Exposure

The Lede

VanEck has intensified the race for yield-bearing crypto products, filing a crucial Form S-1/A with the SEC for its proposed VanEck Avalanche ETF (VAVX). The amendment transforms the fund from a passive price tracker into an actively managed yield vehicle, explicitly incorporating on-chain staking rewards. Markets reacted swiftly to the disclosure, with Avalanche (AVAX) initially spiking 6% before cooling to $12.26 as volume stabilized.

The Receipt

The filing, identified as Amendment No. 3, locks in a competitive 0.30% management fee, undercutting Bitwise’s proposed 0.34% structure. Key operational details include:

• Staking Provider: Coinbase Crypto Services will manage the staking infrastructure.
• The Cut: Coinbase will retain 4% of the staking rewards as a service fee, passing the remainder to the trust.
• Custody Split: Anchorage Digital Bank serves as the primary custodian, with Coinbase Custody Trust Company acting as secondary custodian to mitigate counterparty risk.

The Trust’s investment objective is to reflect the performance of the price of AVAX… and rewards from staking a portion of the Trust’s AVAX.

Institutional Access to DeFi

Most notably, the filing signals a potential bridge between Wall Street and decentralized finance (DeFi). The text outlines the ability to utilize liquid staking protocols—specifically naming Benqi Finance, Hypha, and Yield Yak, to maintain liquidity while accruing yield. If approved, this would mark one of the first instances of a U.S. ETF formally interacting with on-chain liquid staking derivatives (LSDs), moving beyond simple validator delegation.

Market Context

This move mirrors VanEck’s strategy with its Solana ETF (VSOL), reinforcing a trend where issuers view “staking rewards” as the decisive feature for non-Bitcoin products. While AVAX retreated from its local high of $12.66 to trade flat on the day (-0.3%), the structural inclusion of staking rewards forces the SEC to address whether yield generation alters the commodity-vs-security classification of the underlying asset.