The next phase of crypto ETFs may be less about simply tracking prices and more about how yield, custody, and cost are engineered into the product. VanEck’s latest move around Avalanche quietly points in that direction.
Rather than framing its proposed Avalanche fund as a basic spot vehicle, the asset manager is shaping it as a more complex instrument designed to compete on structure, not just exposure. Recent disclosures tied to the product suggest VanEck is positioning itself early for what altcoin ETFs could look like if regulators give the green light.
Key takeaways
VanEck is positioning its proposed Avalanche ETF as more than a simple price-tracking product
The fund is designed to combine low fees with staking-based yield to stand out from rivals
The structure hints at how future altcoin ETFs may evolve if regulators approve them
At the center of that strategy is a balance between low headline costs and additional return sources.
A fee war without giveaways
VanEck has set the baseline cost of its Avalanche ETF below some competing proposals, opting for a leaner annual management fee. Unlike rivals that have leaned on temporary fee waivers to attract early inflows, VanEck appears to be betting that long-term pricing discipline will matter more than short-term incentives.
This choice suggests confidence that demand for regulated AVAX exposure will not hinge solely on promotional discounts, especially if the product offers other differentiating features.
Yield becomes part of the ETF equation
One of those features is staking. Instead of holding Avalanche tokens passively, the proposed fund is designed to stake a portion of its assets, allowing the trust to earn protocol rewards alongside price movements.
To support this, VanEck has lined up Coinbase Crypto Services to handle staking operations. Under the arrangement, a slice of the staking rewards is paid to the provider, while additional facilitation fees are currently set at zero. Rewards are expected to flow back into the trust on a recurring basis.
The structure goes a step further by acknowledging liquid staking. Multiple Avalanche-native protocols are referenced as potential tools, giving the fund flexibility in how staked assets are managed without locking up liquidity entirely.
Infrastructure matters more than branding
Behind the scenes, VanEck is building a familiar institutional stack. Digital asset custody is split between established providers, while traditional financial infrastructure handles cash movements, administration, and transfer agency services.
If approved, the fund is slated to trade on Nasdaq under a dedicated ticker, aligning Avalanche with the same venue that hosts many mainstream ETFs. Price tracking would rely on an established benchmark rather than exchange-specific data, reinforcing the product’s institutional framing.
Why this matters beyond Avalanche
The significance of VanEck’s approach goes beyond AVAX itself. The proposed design reflects how issuers are thinking about the next generation of crypto ETFs: lower fees, embedded yield, multiple custodians, and hybrid on-chain strategies.
As issuers move down the market-cap curve from Bitcoin and Ethereum into altcoins, differentiation becomes critical. Pure price exposure may no longer be enough.
VanEck’s Avalanche filing suggests that, if regulators allow it, altcoin ETFs could start to resemble actively optimized crypto vehicles wrapped in a passive ETF shell.
Whether the SEC agrees remains an open question. But the blueprint is becoming clearer.
