21Shares submits the first SEI ETF application to the SEC: Coinbase acts as the accomplice, and staking yields may become the biggest highlight.

Swiss crypto asset management company 21Shares submitted its first SEI exchange-traded fund (ETF) S-1 registration statement to the U.S. Securities and Exchange Commission (SEC) on August 28. The ETF aims to track the price performance of the Sei network's native token SEI, with Coinbase Custody serving as the asset custodian, and it innovatively proposes a staking yield-sharing mechanism. If approved, this will be another important product layout for 21Shares following the Polkadot ETF and will provide investors with a compliant channel to participate in the development of the SEI ecosystem without directly holding the token.

[Product Design and Operation Mechanism]

According to SEC disclosure documents, the 21Shares SEI ETF will adopt a passive investment strategy that strictly tracks the "CF SEI-US Dollar Reference Rate (New York Variant)" benchmark index calculated by CF Benchmarks Ltd. The fund does not use leverage, derivatives, or speculative trading strategies, and its valuation is based on the benchmark index daily. Authorized participants (typically large financial institutions) can subscribe to ETF shares through a basket of SEI tokens and can also redeem shares for the underlying assets, while cash transactions are converted to SEI tokens through designated counterparties.

[Innovation Breakthrough of the Staking Revenue Mechanism]

The document specifically points out that, if regulatory approval is obtained, the fund plans to participate in SEI network staking through third-party service providers, thereby providing additional returns for investors. This mechanism is relatively rare among existing cryptocurrency ETFs, and its final implementation will depend on legal and tax considerations. If achieved, it will become the first U.S.-listed cryptocurrency ETF to offer both price exposure and staking returns, significantly enhancing the product's appeal. The ONDO ETF previously submitted by 21Shares is also custodied by Coinbase, indicating a deep collaboration between the two companies in the cryptocurrency ETF space.

[Safe Custody and Risk Control]

Coinbase Custody Trust Company will act as the official custodian for the ETF, with all SEI Tokens stored in offline cold wallets, and the private keys managed entirely offline to minimize the risk of theft and loss. The document emphasizes that this product is not a direct investment in SEI Tokens, but rather a fund product that can be accessed through traditional brokerage accounts, significantly lowering the barrier to entry and operational risks for ordinary investors participating in encryption assets.

[Prospects of Regulatory Approval and Industry Impact]

The SEC has previously postponed its decision on the 21Shares Polkadot ETF application multiple times, indicating the regulatory agency's cautious approach to the approval of new types of encryption funds. The approval process for the SEI ETF will serve as an important barometer for observing the SEC's attitude toward small and medium-cap Token ETFs. If approved, it will promote the emergence of more similar products, providing investors with a richer array of encryption asset allocation tools.

[Sei Network Ecosystem and Development Prospects]

Sei Network, as a Layer 1 blockchain focused on trading applications, has seen rapid ecological development of its native Token SEI in recent years. If the ETF is successfully listed, it will bring institutional-level capital inflows and a broader investor base to the network. Coupled with the stake yield mechanism, investors can enjoy dual benefits from both the increase in Token price and the network's staking.

[Conclusion]

The application for the 21Shares SEI ETF represents an important trend in the development of crypto asset management products towards diversification and sophistication. By integrating custody, stake, and traditional securitization packaging, such products are building a bridge connecting traditional finance with the encryption ecosystem. Investors should closely monitor the SEC approval progress and the final implementation of the stake yield mechanism, as this may set a new benchmark for the design of crypto ETF products. At the same time, it should be noted that this product still faces regulatory uncertainty risks, and the approval results are expected to influence the product innovation direction of the entire industry.