Howdy!

I hope this email finds you happy, in your lane, and flourishing. As a side note to today’s story, I’m interested in the fact that crypto ETPs have such an easier time trading in Europe relative to the US. I wouldn’t think of European regulators as being more permissive than US ones, typically. Something to ponder.

That said, here’s today’s main item:

VanEck begins SOL staking with Kiln partnership

The crypto-friendly asset manager VanEck has partnered with Kiln to begin staking SOL, the pair told Lightspeed exclusively.

Kiln is an enterprise staking service that boasts integrations with outfits like Coinbase and Babylon. 

With the move, VanEck will now offer regulated access to solana staking rewards on top of the price of SOL. VanEck is one of a few firms offering regulated solana funds in Europe.  

2024 has been a bullish year for crypto, and the fresh market cycle was largely driven, at least initially, by the long-awaited approval of spot bitcoin ETFs in the US. The products — which give investors exposure to bitcoin’s price in a regulated wrapper — have already seen tens of billions-worth in inflows since getting the SEC’s approval in January. The ETFs trading partly drove bitcoin to a new all-time high this year, the only major crypto to set a new mark during this market cycle. 

Ether ETFs were also approved this year, though the second crypto to get a spot ETF had less inspiring flows. Still, altcoin ecosystems are hoping to catch some of the ETF magic, and firms are lining up behind what looks like a logical next crypto ETF in solana. 

VanEck and 21Shares both applied for spot SOL ETFs this summer, though talks have reportedly stalled over the SEC’s concerns that solana is a security. The filings have been cast as a bet on a Trump victory and a more crypto-friendly regulatory regime taking over sometime in 2025. 

For the moment, the major market for regulated solana products is in Europe. 21Shares’ solana staking ETP is currently the third-largest in Europe with over $1 billion in assets under management (AUM), according to etfbook.com. CoinShares and Valour also have solana ETPs with AUMs of around $300 million. 

VanEck’s European solana fund is more minor, with around $84 million in AUM. Adding staking rewards via kiln may be a play to grow that number. Notably, neither of the US solana spot ETF applications contained staking rewards after approved ether ETFs had staking stripped out. 

VanEck head of digital asset research Matthew Sigel told me he agrees staking rewards will become table stakes for solana ETPs in Europe. In the US, “tell me who wins the election” first, Sigel said in a direct message.

— Jack Kubinec

Are crypto phones really the breakthrough Web3 needs? Solana’s Saga and Seeker are betting on open app stores and crypto-friendly specs to lure users. However, the community remains divided on whether a phone or a dedicated device is the better path.

Bullish

Supporters argue that crypto phones add essential features that standard smartphones lack, like private key storage and a dapp-friendly ecosystem. @SebMontgomery appreciates the freedom to bypass Apple’s "30% price gouging" on apps, while @aceddeca1 suggests the Seeker could be a valuable second device for interacting with decentralized networks like Helium, noting, "If this unlocks more ways to participate in economies that build and earn, I think more people would start to opt out of the ecosystem."

Bearish

Others argue that a specialized crypto phone is unnecessary and that a dedicated device could do the job more effectively. @0xMert_ believes the crypto phone market is misguided, saying, “you are simply never going to get people to ditch their iPhones.” He advocates instead for a “hyper-focused crypto browsing device,” emphasizing that trying to compete with established smartphones is a mistake. "It doesn’t need mass adoption," Mert points out, "it needs adoption — which is done by winning an entire category that you create.”

— Jeffrey Albus