1Valour Ethereum (ETH) Physical Staking ETP

Invest in Ethereum simply, securely
and collect staking rewards at the same time

Get more out of Ethereum - Unlock the potential of Ethereum while maximising your investment with passive staking rewards through Ethereum staking.

Valour’s Ethereum Physical Staking ETP provides investors with trusted and secure exposure to Ethereum with staking rewards income potential. Valour removes the complexities associated with direct on-chain staking on the Ethereum network.  As an asset-backed product, Valour’s ETH Staking ETP benefits investors through its full collateralisation, held by licensed and regulated institutional custodians.

1Valour Ethereum (ETH) Physical Staking
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1.8841
EUR
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May 28, 2024
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Product Details
Issuer
Valour Digital Securities Limited
Name
1VALOUR ETHEREUM PHYSICAL STAKING
ISIN
GB00BRBMZ190
SEDOL
BRBMZ19
Settlement Currency
USD
Trading Currency
EUR
Underlying Asset
Ethereum (ETH/USD)
Expiry Date
Open-ended
Management Fee
1.49%
AUM
153432.13
Outstanding Shares‍
75000.00
Replication Method
Physical
Domicile
Jersey
Partners
Administrator
JTC Group
Authorized Participants
GHCO, Jane Street
Market Makers
GHCO
Custodians
Copper Markets (Switzerland) AG
Collateral Agent/Trustee
The Law Debenture Trust Corporation PLC
Auditor
Baker Tilley
Registrar
JTC Registrars
Trading Details
Exchange
Exchange Ticker
Market Marker
WKN
Listing Date
Bloomberg Code
RIC
Code
Boerse Frankfurt
1VET
GHCO
A3G6BS
17 August 2023
1VET GR Equity
1VET.DE
Underlying Assets
Underlying
Weighting
Coin Entitlement
Reference Price
Ethereum
100%
0.00053467
3826.25

Advantages of Valour's Asset-Backed Exchange Traded Products

Buy into the Market

1Valour ETPs are a safe, accessible and easy way to get exposure to the most successful cryptocurrencies.

Transparent and Secure

1Valour ETPs are 100% physically backed and kept safe in cold storage by licensed and regulated institutional custodians.

Flexible and Liquid

1Valour ETPs can be easily purchased like stocks and bonds on regulated exchanges and via your broker.

Tax Efficient

1Valour ETPs may provide significant investment efficiency. Depending on your situation, certain tax advantages may apply. Ask your tax advisor.

Crypto Staking

Crypto staking enables users to participate in the governance and consensus of a Proof-of-Stake (PoS) blockchain, earning rewards for their contribution. While Proof-of-Work blockchains utilise energy expending miners to validate and generate new blocks, PoS networks elect validators who stake (lock up) collateral to validate and add new blocks to the chain. Validators earn rewards when their proposed block reaches consensus by being verified by other validators on the network. Should the network deem the new block invalid, the selected validator is penalised in the form of having some of their staked holdings slashed. This process ensures that every new block added to the chain contains transactions that are verifiable, thereby guaranteeing the status and security of the network.

Staking on-chain can be a complex process. Typically, validators must lock up their staked holdings for a certain period of time known as the bonding period. Bonding periods vary based on the network and often do not permit for validators to unstake their holdings until completion. Additionally, many networks subject staked funds to an unbonding period before which validators can withdraw their rewards, making it difficult to access funds quickly if needed.

Staking made simple

Valour’s Staking ETPs allow investors to earn passive staking rewards on their holdings. Staking is the process of allocating crypto holdings as collateral to support the blockchain’s operations in return for network rewards. By staking the underlying of Valour’s staking ETPs, investors could earn additional income above the underlying base exposure. 

Staking ETPs eliminate the technical onboarding requirements associated with individual staking. By partnering with leading staking infrastructure providers, Valour takes care of all technical aspects of the process, making staking more accessible and seamless for investors. Valour’s staked ETPs provide investors with a means of contributing towards the future of decentralised finance. In addition to earning rewards for participation, staking helps ensure the overall security of the network, contributing towards its long term success and continued adoption. 

Valour’s ETPs benefit from slashing insurance provided by Valour’s staking partners which offers an element of protection against the risk of losing staked tokens as a result of network issues or other factors.. For investors, this translates into additional safeguards over direct staking, in addition to the 100% collateralisation feature of Valour’s asset-backed program.

Our Partners

Valour has partnered with leading regulated custodians and staking service providers in the structuring of our staked products. Valour’s Ethereum Physical Staking ETP is custodied by VQF registered Copper Markets (Switzerland) AG, and staking services are undertaken by industry leading infrastructure provider, Blockdaemon. In selecting its partners, Valour has prioritised ensuring optimal security of the product’s underlying, ensuring seamless, non-custodial, 100% fully collateralised staking at all times.

FAQs

FAQs
Questions
What is crypto staking?

In Proof-of-Stake blockchains, validators stake (lock up) tokens as collateral to verify and add new blocks to the chain. Validators are typically selected to propagate new blocks based on the proportion of their stake relative to the total stake on the network. Validators earn rewards when their proposed blocks reach consensus by being verified by other validators on the network, ensuring that each new block added to the chain contains valid transactions, thereby guaranteeing the security of the network.

Are Valour's staking ETPs still 100% physically backed?

Valour’s staking ETPs remain 100% physically backed at all times, never leaving Valour’s licensed institutional custodian’s cold storage.

Who are the custodians of Valour's staked ETPs?

For each ETP launch, Valour partners with one of its select institutional custodians Copper Markets (Switzerland) AG and Komainu (Jersey) Limited. Copper Markets (Switzerland) AG is registered with The Financial Services Standards Association (VQF), an SRO recognised by the Federal Financial Market Supervisory Authority (FINMA), and Komainu (Jersey) Limited is regulated by the Jersey Financial Services Commission. Valour regularly evaluates its operational processes and assesses the suitability of new custody partners to ensure optimal security on behalf of its investors.

Who are the staking partners for Valour's staked ETPs?

Valour has carefully selected its staking partners in order to mitigate the risks associated with individual staking on behalf of its investors. In addition to the direct staking services afforded by Valour’s named staked ETP custodians, Valour has selected Figment; a world leading provider of institutional blockchain infrastructure including comprehensive staking solutions, and, Blockdaemon; an industry leading provider of secure institutional blockchain infrastructure for web3 as well as the Web3 Ledger Enterprise platform as chosen partners for Valour’s staked ETPs. These providers work seamlessly with Valour’s named custodians to facilitate non-custodial, 100% fully collateralised staking at all times.

Is any additional action required from the investors to earn a passive staking rewards on staked ETPs?

Valour stakes the assets of eligible staking ETPs with its designated non-custodial staking partners. This means that the underlying assets remain 100% physically backed all of the time whilst accruing staking rewards. These rewards are reflected in the ETPs daily updated Net Asset Value (NAV), with no action required on the investor’s part.

Which Valour ETPs currently support staking?

Staking is a feature of Proof-of-Stake blockchains and is currently available across a number of Valour products whereby support for staking is facilitated by Valour’s licensed custodians and staking providers. As the ecosystem for digital assets continues to grow, Valour regularly looks to expand its product range, offering the most innovative and secure ETPs to its investors.

What are the fees involved with staking?

Valour Staking ETPs are subject to a fixed product specific management fee that is incorporated into the Net Asset Value (NAV) of each product on a daily basis. As explained below, staking rewards generated by networks are dynamic/variable adjusting from day to day/epoch to epoch. Given the additional costs associated with Valour’s staking ETPs, rewards are shared between investors and Valour, whereby Valour will pass through a fixed percentage of staking rewards to investors.

What staking rewards can I expect to earn from Valour's staked ETPs?

Network staking rewards can be influenced by a variety of factors, including for some protocols, the minimum commitment required for network participation e.g. for Ethereum, a minimum stake of 32 ETH is required to become a validator. This requirement can lead to situations where investor funds are not immediately deployed for staking until enough aggregate assets can be committed to a validator to meet the minimum hurdle of 32 ETH. In addition to the minimum required stake, rewards can vary based on the number of participating validators at any given time, as well as total network transaction volume. Staking rewards are typically higher when fewer validators are participating in the network in order to incentivise more stakers to join and secure the network. Given that network usage changes constantly, staking rewards vary accordingly. Valour’s innovative staking products tackle this variability by incorporating a fixed staking reward component that is passed through to investors via daily attribution to Valour staking ETPs’ daily Net Asset Value (NAV).

Will staking be offered on additional Valour ETPs?

Valour frequently assesses its range of innovative and secure exchange traded products to ensure it provides its investors with the best tools to gain a simple and trusted exposure to the future of finance and Web3. As per the company’s roadmap, Valour looks to continuously expand its product line, allowing investors to diversify their portfolios through staking crypto asset products, as well as combined digital asset exposures with other asset classes such as equities and commodities.

Do Valour's staking ETPs provide daily liquidity?

As is the case with all of Valour’s ETPs, Valour’s staking products provide daily liquidity and can be bought or sold daily. In order to ensure the ability to meet its daily redemptions, Valour applies a utilisation rate to each staking product whereby less than 100% of the underlying crypto asset is staked to accommodate for each network’s specific bonding and unbonding periods, as well as the length of each epoch. The longer the network’s specific bonding and unbonding periods and/or epoch length, the lower the utilisation rate Valour is able to deploy to ensure sufficient assets remain ‘unlocked’ to facilitate daily liquidity. Thus, when utilisation rates are low, investors receive lower staking rewards seeing as a smaller % of assets are earning a staking reward on the network.

How are staking rewards paid on Valour's ETPs?

Valour’s staking ETPs are accumulating products whereby a fixed staking reward is added to each qualifying product’s Digital Asset entitlement and reflected in the Net Asset Value (NAV) at the end of each trading day.

Will Valour change the Fixed Coupon on its Staking Products?

Valour is committed to continually monitoring the staking environment for its eligible underlying assets. This assessment encompasses factors including network congestion, liquidity management, and the backing from market makers, custodians, and its staking providers. Valour’s primary aim is to optimise staking rewards for investors whilst simultaneously ensuring daily liquidity and covering costs. Valour may share in the staking rewards with investors. Any potential adjustment to the fixed coupon provided by Valour will be transparently communicated via LSEG RNS notification system through to the ETPs listed exchange. From here the exchange will manage onward communication to end investors.

What are the risks associated with staking:

When staking crypto assets, there are several risks and limitations that should be considered:

Lockup Periods - Bonding and unbonding are two related concepts that refer to the process of staking and unstaking tokens in a blockchain network. Whilst bonding involves locking up tokens as collateral for network validation, unbonding refers to the process of withdrawing staked tokens to be made available for transfer or use elsewhere. Typically, unbonding involves a waiting period in which the tokens cannot be accessed or transferred with the length of lockup varying according to each blockchain network’s rules, ranging from a number of days to months.

Valour’s Utilisation Rate Limits - Seeing as most blockchain networks incorporate an unbonding period before staked assets can be withdrawn for transfer, Valour deploys an innovative algorithm to ensure it can meet the liquidity requirements of its staked ETPs whilst taking the various lock-up periods into consideration. As such, Valour has determined an optimal utilisation rate for each blockchain network in which a portion of assets are left unstaked to accommodate for daily investor redemptions, accounting for the blockchain network’s specific bonding and unbonding period(s), as well as the length of each network’s epoch(s). The longer the network’s specific bonding and unbonding periods and/or epoch length the lower the utilisation rate to ensure sufficient assets remain ‘unlocked’ to facilitate daily liquidity. The lower the utilisation rate the lower the staking rewards received by investors as a smaller % of assets are earning a staking rewards on the network.Slashing - Slashing is a penalty mechanism incorporated by blockchain networks to discourage malicious and negligent behaviour. Given that validators are responsible for maintaining the network’s operations, slashing ensures that participants act within the network’s best interests by removing some of the validator’s stake when the validator goes offline for prolonged periods, engages in double-spend attacks, or attempts to run modified software on the network. The amount slashed varies by network, depending on the severity of the violation. Valour mitigates the slashing risk for its investors via its careful selection of staking partners and their slashing insurance policy coverage (where applicable).

Staking Platform (Validator) Risk - The staking platform used when delegating assets poses its own platform risk arising from the possibility of technical issues and/or security breaches that could compromise the integrity of the staking platform or validator. Considering that malicious and negligent validators are penalised for prolonged downtime and various other network violations, the choice of staking platform could result in the loss of rewards for the investor. Valour seeks to minimise the platform risk through its diligent selection of staking providers, ensuring overall operational professionalism and regulatory compliance.

Disclaimer

As with any financial strategy, investors should be aware of the risks and limitations involved. The information contained above is not exhaustive and should not be relied upon as the sole basis for making investment decisions. Investors should consult the base prospectus for complete information on the investment product, including its terms, conditions, and risks involved.

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