VanEck Submits Avalanche ETF Application to SEC
ETF issuer VanEck has submitted an Avalanche ETF registration application (S1) to the U.S. Securities and Exchange Commission (SEC). Upon approval, investors will be able to directly purchase shares of the Avalanche ETF, holding AVAX stocks. According to the document, the VanEck Avalanche ETF is defined as a trust and represents a type of common stock issued by an exchange. The VanEck Avalanche ETF will be valued based on the MarketVector Avalanche benchmark interest rate, which aggregates pricing data from five major trading platforms. This application follows VanEck’s recent registration of the Avalanche ETF in Delaware, USA, as the company intends to expand its cryptocurrency investment product lineup. VanEck has not yet disclosed the stock ticker for the ETF.
The U.S. Securities and Exchange Commission’s acceptance of the filing does not guarantee approval, and the review process will take some time. Bloomberg analysts James Seyffart and Eric Balchinas expressed optimism, stating that the likelihood of approval this year is high. Following the approval of Bitcoin and Ethereum ETFs, there is strong market anticipation for ETFs of other digital assets. Asset management firms are pushing for Altcoin ETFs beyond Bitcoin and Ethereum. James Seyffart posted the S-1 registration application for the Avalanche ETF on X, receiving a strong response. Following the news, AVAX briefly surged past $19 USD, currently standing at $18.44 USD.
How Does Avalanche Work?
The Avalanche ecosystem consists of three separate blockchains. The top layer is Avalanche’s main network, which is responsible for validating the overall structure of the ecosystem. The main network branches out into three separate blockchains: the X-Chain (Exchange Chain), the P-Chain (Platform Chain), and the C-Chain (Contract Chain).
The C-Chain blockchain, which supports smart contracts, is compatible with the Ethereum Virtual Machine (EVM). On the C-Chain, developers can set up and run Ethereum-based DApps, NFTs, and ERC-20 tokens.
Avalanche’s P-Chain is where developers can create their own blockchains. The X-Chain facilitates the construction and trading of assets on the Avalanche blockchain ecosystem’s native network. These assets can be designed to carry specific key features and functions.
The Avalanche ecosystem relies on subnets or subnets for blockchain validation. A subnet is a group of nodes (validators within the subnet) that determine the consensus of the Avalanche ecosystem’s blockchain. Avalanche’s blockchain is validated by multiple subnet groups, with each blockchain having only one subnet responsible for its validation. However, one subnet can validate multiple blockchains, and a single node can be part of multiple subnets.
The C-Chain and P-Chain are governed by Snowman’s consensus mechanism, which is a proof-of-stake (PoS) system. The X-Chain operates based on the Avalanche consensus protocol, which includes Snowman as part of the framework set within a Directed Acyclic Graph (DAG) structure. Avalanche ecosystem nodes must stake 2,000 or more AVAX and operate as nodes within both the main network and subnets.
Avalanche has a total market value of $7.7 billion, known for its high throughput and Ethereum EVM compatibility. Avalanche’s use in financial innovations like Franklin Templeton’s Tokenized Fund could help its approval process. VanEck’s application for the Avalanche ETF reflects market demand. The SEC’s decision will have significant implications for the future development of Altcoin ETFs.
Risk Disclaimer
Cryptocurrency investments are highly risky, and their prices can fluctuate dramatically. You may lose all of your principal. Please assess the risks carefully.
