VanEck has launched a new digital assets ETP in Europe providing exposure to a basket of cryptocurrencies underpinning leading smart contract platforms.
Matthew Sigel, Head of Digital Assets Research at VanEck.
The VanEck Smart Contract Leaders ETN (VSMA GY) has been listed on Deutsche Börse Xetra in euros.
Smart contracts are automated programs that are stored on a blockchain and run when predetermined conditions are met.
Their function is to execute agreements in such a way that all participants can be immediately certain of the outcome.
Additional smart contract benefits include anonymity, authenticity, and frictionless transactions, as well as time and cost savings resulting from the absence of intermediaries.
Matthew Sigel, Head of Digital Assets Research at VanEck, said: “Smart contracts represent a crucial component of the decentralized finance universe and are already reshaping numerous corners of the traditional finance world as well. Our digital assets investment line-up offers investors a powerful tool for adding smart contract exposure to their portfolios without having to go ‘all in’ on a single cryptocurrency.”
Methodology
The ETP tracks the MVIS CryptoCompare Smart Contract Leaders VWAP Close Index which references the performance of the largest and most liquid smart contract crypto assets.
Eligible assets must be listed on at least one of the largest 15 cryptocurrency exchanges. They must also have a total market capitalization of at least $1 billion and average daily trading volume in excess of $25 million.
Constituents are weighted by market value while capping the weight of any single asset at 30%.
As of 4 May, the index contained five assets: Ethereum (32.5%), Cardano (23.3%), Solana (24.6%), Polkadot (13.0%), and TRON (6.6%).
The ETP is designed to offer institutional investors easy, diversified access to these leading smart contract crypto assets through a liquid, regulated vehicle without the technical challenges of setting up private keys or crypto wallets.
It uses full direct, so-called ‘physical’ replication with each ETP share being 100% collateralized by a corresponding investment in the underlying crypto assets which are stored using an institutional-grade, ‘cold storage’ custody solution provided by Bank Frick.
The ETP comes with an expense ratio of 1.50%.