Asset Manager VanEck Files to List Lido Stake Ethereum ETF

VanEck, an investment management firm, has revealed intentions to launch Lido Staked ETH ETF. The firm submitted an S-1 registration statement to the U.S. Securities and Exchange Commission (SEC) for the listing.

Details of the Proposed VanEck Lido Staked ETH ETF

As revealed in a blog post, the proposed VanEck Lido Staked ETH ETF fund is designed to give investors exposure to stETH. This is a liquid staking token issued by the Lido protocol, representing ETH that is staked to secure the Ethereum blockchain.

Through the proposed ETF, investors can gain exposure to Ethereum staking rewards without directly managing stETH or interacting with the Lido protocol.

It aims to provide a regulated, tax-efficient investment vehicle for institutional investors to participate in Ethereum staking within a familiar ETF structure.

The ETF is designed to replicate the Ethereum staking rewards. Therefore it would permit  investors to earn returns similar to those from staking ETH directly via the Lido protocol.

The Role of Lido Protocol

The Lido protocol will play a key role in the VanEck Staked ETH ETF. Essentially, the protocol would allow users to stake ETH without locking it up or running their own validator nodes. This provided liquidity by issuing stETH,which can be traded or used in DeFi.

Notably, the Lido protocol is decentralized, audited for security, and integrated with major custodians and exchanges. The protocol has a total value locked (TVL) of nearly $40 billion. It has distributed over $2 billion in staking rewards to users.

Meanwhile, the ETF filing comes after VanEck CEO Jan van Eck called Ethereum “the Wall Street token.”

Growing Acceptance for Liquid Staking

The filing reflects growing acceptance of liquid staking as a core component of the Ethereum ecosystem. It combines decentralization with institutional-grade standards.

In July, crypto investment and research firm Galaxy partnered with Liquid Collective to provide institutions with access to Ethereum liquid staking. This partnership comes after the SEC clarified that staking is not considered a security or investment contract. 

If approved by the SEC, the VanEck ETF would offer a compliant way for institutions to invest in Ethereum liquid staking, potentially increasing adoption.

Liquid staking eliminates the need for ETF issuers to hold idle ETH for redemptions.

Moreover, Binance Labs made a strategic investment in Lombard Finance, last year. This action demonstrates the continued evolution of liquid staking platforms.