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Ethereum ETN

Future of Financial Services and Products

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VanEck Ethereum ETN

  • Exposure to the first and largest smart-contract platform
  • 100% collateralized with ETH in cold storage at a regulated custodian
  • Tradeable on regulated stock exchanges
  • Earn up to 5% additional yield through staking rewards* with the VanEck Ethereum ETN
VETH

ETN-Details

ETN-Details

Basis-Ticker: VETH
ISIN: DE000A3GPSP7
TER: 1.00%
AUM: $145.0 M (as of 19-04-2024)

Lower risk

Typically lower reward

Higher risk

Typically higher reward
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Risk: You may lose money up to the total loss of your investment due to the extreme volatility of this asset class and the Main Risk Factors described below and additional risks described in the sales prospectus. *Staking rewards are not guaranteed. 

What is Ethereum?


Proven Technology & Strong Network Effect

Ethereum, and its native currency ETH, have the strongest network effect compared to all other smart contract platforms in the market. It’s technology is battletested while at the same time continuously improving due to the massive ecosystem of developers building on its network.

Invest in the Potential Future of Financial Services and Products

Ethereum is the fast-growing platform for digitizing physical assets – arguably a new frontier for finance and many other sectors. As the platform gains ground, its Ether (ETH) currency is gaining value. VanEck's Ethereum ETN allows to invest in this growing ecosystem, in a comparable manner to a traditional ETF.

What is Staking

Ethereum is a decentralized, open-source blockchain platform that enables smart contract functionality. It allows developers to build and deploy decentralized applications (DApps) on its network. Ether (ETH) is the native cryptocurrency of Ethereum, used to compensate participants who perform computations and validate transactions.


Proof-of-Stake (PoS) is a consensus mechanism used by some blockchain networks, including Ethereum, to achieve agreement on the state of the network. In a PoS system, validators (participants who hold a stake in the network) are chosen to create new blocks and validate transactions based on the amount of cryptocurrency they hold and are willing to "stake" as collateral. The more cryptocurrency a validator stakes, the more likely they are to be chosen to validate transactions and create new blocks.

Here's how it works:

  1. Validators lock up a certain amount of cryptocurrency as stake.
  2. Validators are chosen to create new blocks and validate transactions based on a combination of factors, including the amount of cryptocurrency they hold and are willing to stake, and a random or deterministic selection process.
  3. Validators who successfully validate transactions and create new blocks are rewarded with transaction fees and newly minted cryptocurrency.
  4. Validators who behave maliciously or try to attack the network risk losing their staked cryptocurrency as a form of punishment.
  • Resource Requirement: Proof-of-Work requires validators (miners) to expend computational resources (electricity and hardware) to solve complex mathematical puzzles, whereas Proof-of-Stake requires validators to stake cryptocurrency.
  • Security: Both mechanisms aim to secure the network, but they do so in different ways. Proof-of-Work relies on the computational power of miners to secure the network, while Proof-of-Stake relies on the economic incentives of validators to maintain the network's integrity.
  • Environmental Impact: Proof-of-Work is criticized for its high energy consumption, as mining requires significant computational power. Proof-of-Stake is considered to be more energy-efficient because it doesn't require intense computational calculations.
  • Decentralization: Both mechanisms have implications for decentralization. Some argue that Proof-of-Work tends to centralize around miners with significant resources, while Proof-of-Stake may lead to centralization among validators with large stakes. However, PoS protocols often implement mechanisms to mitigate centralization risks, such as delegation or slashing.

In summary, Ethereum is a blockchain platform that supports smart contracts, and it transitioned from a Proof-of-Work to a Proof-of-Stake consensus mechanism in 2022, where validators are chosen based on the amount of cryptocurrency they hold and are willing to stake, rather than the computational power they provide.

Earn up to 5% Additional Yield* with the VanEck Ethereum ETN

The Ethereum Staking Yield is by many considered to be like the “risk-free” rate of Crypto. Staking is the use of capital at risk in the form of locked tokens to secure the network, earn yield for providing your resource. The locked tokens represent a vote that contributes in distributed consensus and execution of transactions.

  • Earn passive income through the VanEck Ethereum ETN
  • Access to staking yield with a product that trades like an ETF
  • Contribute to the network’s security, a win-win for the investor and the decentralized community

*Staking rewards are not guaranteed.

How does Staking work in Practice for the VanEck Ethereum ETN?

Staking is now enabled for the VanEck Ethereum ETN. What does this mean for you as investor and what do you need to do to earn additional rewards? Here are the key features of how staking is done through the VanEck Ethereum ETN.

  • The staking methods we employ are fully non-custodial, that means that the Custodian of the ETNs assets remains in full control of the staked assets. There is no lending risk involved.
  • Investors of the Ethereum ETN do not need to take any action, if rewards are paid out, they will be accounted for in the coin entitlement of the ETN. There is no difference whether you acquired the ETN last year or last week, the total staking rewards acquired during last timeframe will be equally distributed (minus the staking provider fees and tax)
  • Any staking rewards will be included in the end of day NAV on a daily basis with a cut-off point at 4pm CET. The rewards to be included in the NAV are accrued for the previous day (or days in case of weekends and holidays) from 00:00 UTC (T-1) to 00:00 UTC (T).
  • How does staking work in practice in case of the ETN?
    1. VanEck utilizes the Physical ETH held by theETN for staking by instructing the custodian to deposit ETH on a validator deposit address. The validator node is owned and maintained by the staking provider, but control of the deposited ETH remains at the custodian. The control of the deposited ETH never leaves the cold storage of the custodian.
    2. Once successfully deposited on the validator node, the validator node receives consensus layer and execution layer rewards on continuous basis.
    3. The accrued rewards are reinvested (and sometimes also staked again)) into the note on a daily basis. The accrued rewards are reflected in the ETNs performance
    4. This process is repeated, scaled up or down depending on network and market circumstances to ensure the Ethereum ETN remains sufficiently redeemable on any given business day. We have processes and monitoring in place to manage the liquidity requirements of the ETN.

Adding an Ethereum ETN to a Portfolio

Even a small investment in an Ethereum ETN would have improved a portfolio’s performance over the last few years. This exposure can be gained through VanEck's Ethereum ETN, in a similar way to an ETF.

60% Equities / 40% Bonds Portfolio

*Equities are represented by the MSCI World NR USD Index. Bonds are represented by the Bloomberg Barclays Global Aggregate Corporate Index.

Source: Morningstar. The performance quoted represents past performance which is no guarantee of future results. Future performance may be lower or higher than current performance. Investment returns will fluctuate so that investors' shares, when redeemed, may be worth more or less than their original costs.

Add 0.5% Ethereum

*Equities are represented by the MSCI World NR USD Index. Bonds are represented by the Bloomberg Barclays Global Aggregate Corporate Index.

Source: Morningstar. The performance quoted represents past performance which is no guarantee of future results. Future performance may be lower or higher than current performance. Investment returns will fluctuate so that investors' shares, when redeemed, may be worth more or less than their original costs.

Add 1% Ethereum

*Equities are represented by the MSCI World NR USD Index. Bonds are represented by the Bloomberg Barclays Global Aggregate Corporate Index.

Source: Morningstar. The performance quoted represents past performance which is no guarantee of future results. Future performance may be lower or higher than current performance. Investment returns will fluctuate so that investors' shares, when redeemed, may be worth more or less than their original costs.