VanEck launches crypto asset ETPs based on SOL, TRON and DOT | ETF Strategy

VanEck has unveiled three new crypto asset ETPs in Europe providing exposure to Solana, TRON, and Polkadot.

The VanEck Vectors Solana ETN (VSOL GY), VanEck Vectors TRON ETN (VTRX GY), and VanEck Vectors Polkadot ETN (VDOT GY) have been listed on Deutsche Börse Xetra in euros.

According to VanEck, Solana, TRON, and Polkadot were selected as the basis for the ETPs as they scored favourably on multiple criteria including market capitalization, functionality, number of transactions, exchange availability, track record, and development team.

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Solana is a highly functional open-source project providing decentralized finance solutions. Its main innovation is its proof-of-history consensus which leads to incredibly short validation times and allows the blockchain to handle thousands of transactions per second. The protocol is designed to have low transaction costs while still guaranteeing speed and scalability. SOL, the token underpinning the Solana blockchain, is currently the seventh-largest cryptocurrency globally by total market capitalization.

TRON aims to host a global entertainment system for the cost-effective sharing of digital content. Software developers use the Solidity programming language to create apps that are then sold directly to consumers through the TRON platform, effectively eliminating the middleman. TRON is based on Delegated Proof of Stake which is said to be more energy-efficient and faster than proof-of-work or proof-of-stake models. TRX, the token underpinning the TRON blockchain, is currently the twenty-fifth-largest cryptocurrency globally.

Polkadot is a blockchain of blockchains, allowing otherwise independent blockchains to communicate with each other, share security features, and transfer assets freely amongst themselves. DOT, the token underpinning the Polkadot blockchain, serves two vital roles in the system – it is designed to participate in governance decisions, including tabling proposals and voting, and it is used as an electronic payment system. DOT is currently the ninth-largest cryptocurrency globally.

VSOL, VTRX, and VDOT are 100% “physically” backed by SOL, TRX, and DOT, respectively, providing direct exposure to the underlying cryptocurrencies with the added oversight, security, and liquidity inherent in the ETP structure.

The ETPs’ crypto holdings are kept in institutional-grade “cold storage” by Bank Frick, a Liechtenstein-based institution specializing in crossover finance.

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The new listings extend VanEck’s crypto suite to five products with the two existing ETPs offering directly backed exposure to bitcoin and ethereum.

The three new ETPs come with expense ratios of 1.50%, while the $200m VanEck Vectors Bitcoin ETN (VBTC GY) and $100m VanEck Vectors Ethereum ETN (VETH GY) cost 1.00%.

Martijn Rozemuller, CEO at VanEck Europe, said: “Ethereum and bitcoin, as the two largest cryptocurrencies, are admittedly strongly established in the market. Because of their low correlation to other asset classes, they also represent good opportunities to diversify one’s portfolio.

“But the market continues to be in flux. In total, there are around 10,000 different cryptocurrencies and no one knows which will be the most important in ten years. Who would have thought in the 90s that Nokia and Blackberry, for example, would one day lose such importance? Investors should, therefore, be given the opportunity to invest broadly in digital assets as well. We’re going to address that now.”