ETF issuer VanEck has submitted a registration application (S1) for the Avalanche ETF to the U.S. Securities and Exchange Commission (SEC). Once approved, investors will be able to directly purchase shares of the Avalanche ETF, which will hold AVAX stocks. According to the documents, the VanEck Avalanche ETF is defined as a trust and is a type of common stock issued by an exchange. The VanEck Avalanche ETF will be valued based on the MarketVector Avalanche benchmark rate, which aggregates pricing data from five major trading platforms. This application follows VanEck’s recent registration of the Avalanche ETF in the state of Delaware, as the company seeks to expand its lineup of cryptocurrency investment products. VanEck has not yet disclosed the stock ticker for the ETF.
The submission to the SEC does not guarantee approval, as the review process will take some time. Bloomberg analysts James Seyffart and Eric Balchinas are optimistic about the high likelihood of approval this year. After the approval of Bitcoin and Ethereum ETFs, there is growing anticipation in the market for ETFs related to other digital assets. Asset management companies are pushing for Altcoin ETFs beyond Bitcoin and Ethereum. James Seyffart posted the S-1 registration filing for the Avalanche ETF on X, receiving a strong response. Following the news, the price of AVAX surged to over $19 USD before settling at $18.44 USD.
How Does Avalanche Work?
The Avalanche ecosystem consists of three independent blockchains. At the top is Avalanche’s mainnet, the overall structure responsible for validating the ecosystem. The mainnet branches out into three independent blockchains: the X-Chain (Exchange Chain), P-Chain (Platform Chain), and 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 create and run Ethereum-based DApps, NFTs, and ERC-20 tokens.
The P-Chain of Avalanche is where developers can create their own blockchains. The X-Chain facilitates the construction and trading of assets within the Avalanche blockchain ecosystem itself. These assets can be designed to carry specific features and functionalities.
The Avalanche ecosystem relies on subnets, or subnetworks, to perform blockchain validation. A subnet is a group of nodes (validators within the subnet) that determines the consensus for blockchains in the Avalanche ecosystem. Each blockchain has one subnet responsible for its validation, but a subnet can validate multiple blockchains, and a node can be part of multiple subnets.
The C-Chain and P-Chain are governed by the Snowman consensus mechanism, which operates under a proof-of-stake (PoS) system. The X-Chain operates according to the Avalanche consensus protocol, including Snowman as part of the framework set by a directed acyclic graph (DAG) structure. Avalanche ecosystem nodes must stake 2,000 or more AVAX tokens to operate as nodes in both the mainnet and subnets.
The total market capitalization of Avalanche is $7.7 billion, known for its high throughput and Ethereum EVM compatibility. Avalanche’s involvement in Franklin Templeton’s Tokenized Fund, a financial innovation application, may help facilitate its approval. VanEck’s Avalanche ETF application 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 may fluctuate significantly, potentially resulting in the loss of your entire principal. Please assess the risks carefully.