Key Points
- Figment Europe and Apex Group are preparing to launch Ethereum and Solana staking exchange-traded products (ETPs) on the SIX Swiss Exchange.
- The ETPs are designed to offer institutions easy access to staking rewards through traditional brokers or banks.
Figment Europe and Apex Group, an institutional staking services provider, are gearing up to debut Ethereum and Solana staking ETPs on the SIX Swiss Exchange. The launch, scheduled for March 12, will be facilitated by Issuance.Swiss AG.
The Rationale Behind the ETPs
The ETPs, named Figment Ethereum Plus Staking Rewards (ETHF) and Figment Solana Plus Staking Rewards (SOLF), are designed to grant institutions easy access to staking rewards. This is achieved by using a familiar ETP wrapper and traditional brokers or banks.
Staking rewards on Ethereum and Solana are incentives earned by locking up the respective cryptocurrencies. This process supports the operation and security of their blockchain networks.
The Functionality of the ETPs
The Ethereum and Solana staking ETPs are designed to streamline the process for institutions to access staking rewards from leading proof-of-stake assets. The ETP structure ensures full collateralization and over 50% staking utilization, which is returned to investors. This allows conservative institutions to safely hold this asset class via an ETP, without directly funding Ethereum or Solana validators.
In addition to providing exposure to the underlying crypto assets, the staking rewards generated via the ETPs include maximal extractable value (MEV). MEV refers to the maximum value that validators can extract in the block production process, in addition to the standard block reward and transaction fees. This value can potentially be passed on to stakers.
The Figment ETPs come with a management fee of 1.5%, which compares favorably to similar products in the market. For instance, 21Shares’ ether product charges a 1.49% fee and its solana ETP has a 2.5% fee.
The Figment CEO did not comment on the specific level of yields anticipated. However, it's worth noting that while the ETPs simplify the process within a regulatory-compliant wrapper, the ether and solana staking yields on offer are significantly lower than via crypto-native solutions.
With U.S. spot bitcoin ETFs launching successfully in January, attention has now shifted toward the prospect of spot ether ETFs coming next. However, opinions on the prospect of approval from the Securities and Exchange Commission this year remain mixed.
While spot ether ETFs might be next, following a similar approval process to that of CME futures and futures ETFs prior to the approval of bitcoin spot ETFs in the U.S., the prospects of spot ETFs for solana or other crypto assets remain remote for now.
