ETF News: VanEck Files for First U.S. Lido Staked ETH ETF

VanEck files for the first U.S. Lido Staked ETH ETF, offering regulated exposure to Ethereum staking and bridging DeFi with traditional finance.

VanEck has filed a registration statement with the SEC. This filing is for the proposed “VanEck Lido Staked ETH ETF.” If it were to be approved, this would be the first U.S. ETF to reference stETH. This fund provides regulated exposure to Ethereum staked using Lido protocol. This move represents a major bridge between decentralized finance and traditional investing.

VanEck Seeks First US Liquid Staking ETF Approval

The proposed ETF would mainly contain stETH assets. Furthermore, this token has the benefit of well-audited smart contracts. It has deep secondary market liquidity too. Integrations with leading custodians and exchanges are good. Since its launch, Lido protocol has experienced massive growth. Staking users have earned more than $2 billion in rewards. Currently, the total value locked in the protocol is close to $40 billion.

Therefore, this filing is an important industry first. It brings on-chain exposure closer to mainstream portfolios. Specifically, it gives institutional investors a tax-efficient route. They can get exposure to Ethereum staking in a regulated structure. This new approach is very similar to Ethereum’s staking economics.

Related Reading: VanEck Registers Lido Staked Ethereum Trust in Delaware | Live Bitcoin News

Moreover, the ETF would ensure liquidity to investors on every working day. It also has on-chain transparent backing. For ETF issuers, it’s very beneficial to be able to stake liquid. It takes the need to hold idle ETH for the redemptions out of the equation. As a result, the creations and redemptions can be managed efficiently. This is because stETH is tradable without the withdrawal delays that are typical in Ethereum withdrawal.

As a result, collateralizing redemptions are not required in this kind of structure. This is the most important aspect for fund management efficiency. The filing shows faith in the design of the product. This confidence also applies to its compliance with the US regulatory framework.

Regulatory Clarity Paves Way for Decentralized Finance Products

Kean Gilbert is Institutional Relations Head at the Lido Ecosystem Foundation. He said the filing reflects an emerging recognition Liquid staking is now considered the necessary infrastructure of Ethereum. He finds the Lido protocol’s stETH as proof that decentralization works well. It is a proof that institutional standards can coexist effectively.

Recently, the Division of Corporation Finance of the SEC provided important clarification. The division said standard liquid staking activities do not amount to securities transactions. This is the case where the activities are ministerial and administrative. In fact, this advice is a much better basis for regulated products. It implies that staking receipt tokens are not securities in themselves. This is because the assets they are based on, such as ETH, are not securities.

Sam Kim, Chief Legal Officer at the Lido Labs Foundation, commented on this. He concurred that such filings have more regulatory understanding. The Lido Labs Foundation has been very active in terms of policy discussion. They have gone through groups such as the Crypto Council for Innovation (CCI).

In addition, their goal is to support decentralized protocols such as Lido’s. They provide for these protocols to be able to provide for compliant, transparent access. This ongoing engagement helped inform positive policy conversations. Ultimately, this effort makes the framework open to innovation.

The filing shows that there is still a high market demand for yielding crypto products. Moreover, the firm is communicating its long-term belief in the Ethereum ecosystem. The result will serve as a precedent to future liquid staking derivatives. Therefore, the entire crypto industry is waiting for the final decision of the SEC. This ruling will be decisive for the process of access to staking yield for US investors.