VanEck Files for First US Ethereum Staking ETF

• The fund is designed to provide investors with regulated exposure to the tokenized staking derivative stETH, which represents ETH staked via Lido DAO
• According to the filings, stETH has a strong on-chain presence, where Lidos protocol boasts nearly $40 billion TVL
• The SECs Division of Corporation Finance clarified earlier this year that certain liquid-staking tokens may not qualify as securities if they meet administrative or ministerial criteria

VanEck, a global investment management firm, has submitted an S-1 registration statement to the US Securities and Exchange Commission (SEC) for a proposed ETF named the ‘VanEck Lido Staked ETH ETF’. The fund is designed to provide investors with regulated exposure to the tokenized staking derivative stETH, which represents ETH staked via Lido DAO.

According to the filings, stETH has a strong on-chain presence, where Lidos protocol boasts nearly $40 billion TVL and more than $2 billion in staking rewards distributed to date.

Also, the ETF would track the performance of stETH (thus indirectly staking ETH) and offer daily liquidity, which is a way for investors to access ETH staking returns without running validator infrastructure themselves.

This ETF news is notable because it would be the first US ETF referencing stETH, a sign of increasing institutional recognition of liquid staking.

Regulatory shift opens the door for liquid staking products

The SEC‘s Division of Corporation Finance clarified earlier this year that certain liquid-staking tokens may not qualify as securities if they meet administrative or ministerial criteria. This provided the regulatory opening needed for products such as VanEck’s stETH-based ETF to be proposed.

At the same time, members of the Lido Labs Foundation have been involved in conversations with industry leaders and regulators about liquid staking. By working through groups like the Crypto Council for Innovation (CCI) and the Blockchain Association, the foundation has helped educate both lawmakers and the crypto community on how this technology works and what it means.

Interestingly, there is a growing wave of new ETF proposals, with companies filing for funds that hold Ethereum directly or are tied to the rewards from staking it. Market experts say that earning yield through staking is becoming a popular type of asset for investors.

However, the ETF is not approved yet, and as part of its review, the SEC is closely examining how the fund would hold the assets, process investor withdrawals, and handle the rewards earned from staking. The organization is also assessing operational risks, including what happens if the network validators go offline or are penalized.

Also, its worth noting that tokens like stETH, which represent staked assets, still involve certain risks. These include potential technical problems with the underlying code or platform, as well as financial risks such as a possible decrease in the rewards earned.