‘Fees this low are a good sign’ – Inside VanEck’s latest Solana ETF update

Key Takeaways

What does the VanEck Solana ETF aim to offer investors?

The ETF provides regulated exposure to Solana tokens while allowing investors to earn staking rewards through trusted validators.

Who will provide custodial services for the ETF’s holdings?

Custodial services will be handled by Gemini and Coinbase to ensure the secure storage of SOL tokens.

Amid growing anticipation over the SEC’s long-delayed crypto ETF approvals, VanEck submitted its fifth amended filing for the Spot Solana [SOL] ETF.

VanEck’s Solana ETF amendment

The proposal was submitted to the SEC on the 14th of October, detailing how the fund will operate.

As per the filing, the ETF now aims to give investors regulated exposure to SOL tokens and incorporates staking rewards through trusted validators, allowing investors to earn yield while holding SOL.

Gemini and Coinbase will provide custodial services for the fund’s holdings, ensuring secure storage of the digital assets. The latest update further specifies a 0.30% management fee and clarifies the fund’s staking strategy.

Moreover, VanEck also outlined a liquidity risk policy for its staking model to facilitate redemptions even in volatile market conditions.

Lastly, the fund will maintain a 5% buffer to prevent unbonding delays, typically two to three days on Solana, from blocking investors who want to redeem their funds.

Optimism prevails around SOL ETF

The approval of the ETF has been temporarily delayed because of the U.S. government shutdown. However, it aims to provide institutional investors with a regulated pathway to Solana.

Senior ETF analyst at Bloomberg Eric Balchunas, noted, 

“Solana spot fee 30bps, staking fee 28bps. Seems reasonable, love how clear they make it too, people need to be able to compare and contrast quickly. Solana ETF fees being this low off the bat good sign, will make them very attractive vs other funds & intermediaries out there.”

Additionally, other analysts also suggest that a “buy the rumor, sell the news” scenario could play out.

In fact, data from Polymarket indicate strong odds for approval, indicating that 2025 might witness the launch of the SOL ETF. 

Not only this, even JP Morgan projected the next Solana ETFs could attract around $1.5 billion in inflows during their first year, a solid start, though modest compared to Bitcoin [BTC] or Ethereum [ETH] ETF launches.