VanEck Proposes AVAX ETF with Professional Custody Structure and Staking Yield

VanEck has refined its Avalanche ETF application (VAVX) to feature an innovative staking rewards mechanism while ensuring assets are custodied by regulated institutional providers. The proposal outlines how Avalanche holders could gain passive income exposure through a mainstream investment vehicle.

Staking Strategy: Converting Holdings into Yield

The fund plans to direct up to 70% of its AVAX holdings into active staking operations, generating ongoing rewards that flow directly into the fund’s net asset value. Participants will pay a 4% service fee for this yield-generating infrastructure. At current prices around $9.27 per AVAX token, this approach enables investors to capture Avalanche’s native staking economics without managing validators independently.

Institutional-Grade Security: Assets Custodied by Regulated Leaders

The critical differentiator lies in custody arrangements. Assets will be custodied by established institutions including Anchorage Digital and other regulated custodians, ensuring investor protection. This structure addresses security concerns that typically plague retail staking platforms—every AVAX holding remains under professional oversight rather than being locked in less transparent staking pools.

Market Debut and Tracking Mechanism

Upon SEC approval, VAVX will debut on Nasdaq, tracking AVAX price movements through a custom index methodology. The dual benefit—price exposure plus staking rewards—creates a compelling offer for institutional and retail investors seeking simplified Avalanche participation without technical barriers or custody risks associated with direct staking.