Virtune Staked Cardano ETP

Frequently asked questions

What is a crypto-ETP?

A crypto-ETP (Exchange Traded Product) is an exchange-traded product that provides Exposure to one or more Crypto assets, such as Bitcoin or Ethereum, without you having to purchase or store the Crypto assets yourself.

Virtune’s ETPs are traded on regulated markets and can be purchased through your regular bank or online broker, and they track the value of the underlying Crypto assets. This means you can hold your crypto investments together with shares, funds and ETFs in the same account.

Why should I choose to invest in Virtune's products instead of trading crypto assets directly?

Investing in Virtune's ETPs offers several distinct advantages for you as an investor:

Simple and Secure: You avoid the complexity of creating and managing a digital wallet, as well as the challenges of selecting a secure crypto exchange for trading. All aspects of security and storage are handled by us.

Tax Efficiency: Investing in our ETPs can be associated with tax benefits. In Sweden it is possible to invest in our ETPs through an Investment Savings Account (ISK) or a Capital Insurance means you do not need to declare individual transactions. Instead of a 30% capital gains tax on direct crypto trading, you pay an annual fixed tax, which can provide significant tax benefits.

Regulated Trading Venue: Our products are traded on Nasdaq, a regulated and secure marketplace, adding an additional layer of safety and reliability to your investment.

Physically Backed Products: All our ETPs are 100% physically backed, meaning that actual crypto assets are stored corresponding to the market value of each ETP, ensuring transparency and trust.

Staking Opportunities: Some of our products also offer staking, which is managed by us and provides extra returns without any effort required from you.

Virtune is a Swedish company based in Stockholm with an EU-approved base prospectus for the market listing of crypto ETPs. We strive to be the safe choice for your crypto investments.

What does it mean that the products are physically backed?

All of Virtune's ETPs are always 100% physically backed, this means that we store the equivalent value of all outstanding securities in the underlying crypto asset with our custodian in cold-storage (offline). The equivalent value of each ETP in the underlying cryptocurrency asset is received and stored separately with our custodian Coinbase before new ETPs are created.

Our products are priced through a so-called coin entitlement to the underlying crypto assets, which means that 1 ETP represents a certain amount of crypto assets. This structure ensures a 1:1 exposure to the underlying crypto asset with the highest possible investor protection and minimized credit risk towards the issuer (Virtune) of the ETPs.

Where can I buy your products?

Our products are listed on stock exchanges which includes Nasdaq Stockholm, Nasdaq Helsinki, Deutsche Boerse Xetra, Warsaw Stock Exchange, Euronext Amsterdam, Euronext Paris and Boerse Stuttgart and can be traded through several online brokers and banks. If our products are missing on your platform, contact them and ask if the products are available for trading and please contact us with your request to add our products to your platform.

How are the products priced?

Our products are priced based on a 1:1 correlation with the performance of the underlying crypto asset, minus a management fee and, for our staking ETPs, plus staking rewards. They are priced through what we refer to as 'coin entitlement' to the underlying crypto assets, meaning that one ETP represents a specific quantity of crypto assets stored with our custodian. For our staking ETPs, staking rewards are continuously added, contributing to an increase in the amount of crypto assets per ETP over time. You can track the daily amount of crypto assets per ETP on each product page. Each crypto asset is priced according to regulated and established crypto asset reference rates.

What are the benefits with your physically backed ETPs compared to crypto tracker certificates?

All of Virtune's ETPs are 100% physically backed by the underlying crypto assets (asset-backed securities), which means that we store the equivalent value of all outstanding securities in the underlying crypto asset with our custodian in cold storage (offline). This reduces the credit risk to Virtune as the issuer and is a safer option for investors compared to investing in tracker certificates that provide synthetic exposure and do not hold the underlying crypto assets as collateral. In such cases, you could theoretically lose your entire investment if an issuer of synthetic tracker certificates goes bankrupt. This is not the case with Virtune's products, as the crypto assets stored separately with Virtune's custodian serve as underlying collateral, protecting your investment in Virtune's ETPs.

What is Virtune and what services does Virtune offer?

Virtune is a regulated crypto asset manager that offers crypto Exchange Traded Products (ETPs) with an EU-approved base prospectus. We are a dedicated and passionate team of professionals that are strong believers in blockchain technology and crypto assets, committed to harnessing its potential to benefit the world. Our mission is to accelerate crypto adoption across Europe for institutional and retail investors, educate the market, and uphold the highest standards of transparency.
Our mission is to lower the barriers to entry into the crypto market by providing a easy, secure and regulated way for investors to gain exposure to crypto.

What is staking?

Staking enables crypto asset owners to earn passive income by participating in the validation and confirmation of transactions on a blockchain through a process known as Proof of Stake. This mechanism is a fundamental component of Proof of Stake blockchains, like Ethereum and Solana, and plays a vital role in ensuring the security and authenticity of blockchain transactions. To facilitate a transaction on the blockchain securely and accurately, a validator must stake a certain amount of crypto asset as a guarantee of the transaction's legitimacy. The validator aims to stake as much crypto assets as possible to increase the likelihood of receiving rewards, which are paid out in the same type of crypto asset that was staked. For instance, if you stake Ethereum, you receive additional Ethereum as a reward. The annual reward percentage for staking can vary and may range from 0-14% or higher for some blockchains. Most crypto asset holders cannot act as validators themselves, as it requires significant amounts of crypto assets. Therefore, many choose to stake their assets through an established and trusted validator. Virtune includes staking rewards in its products that have 'staking' included in their names.

What are the benefits for me as an investor with staking?

Staking enables investors to earn additional returns on a crypto asset beyond its potential value growth. This is achieved by contributing to the blockchain through transaction validation, a core function of crypto asset blockchains that utilize Proof of Stake. Staking a crypto asset also helps avoid dilution caused by inflation in the blockchain network. The annual reward rate varies between different crypto assets, typically ranging from 2% to 14%. Virtune offers a fixed annual staking yield of 2-4% for several ETPs. In Virtune Staked Ethereum ETP, the annual staking yield varies where 75% of the annual staking rewards are returned to investors, potentially increasing the Net Asset Value (NAV) over time through these rewards. The remaining 25% is allocated to the custodian, staking provider, and Virtune for managing and maintaining the staking operations of the ETP. The additional return from staking rewards is reflected in the daily NAV of Virtune's staked ETPs.

What are the risks with staking?

There are two main risks associated with staking: lockup periods and slashing.

Lockup periods in staking refer to a timeframe during which staked crypto assets are locked and cannot be readily moved or sold. This is similar to an interest savings account where your assets are tied up for a specific period. The length of the lockup period can vary, ranging from 0 to 28 days, depending on the specific staking protocol or platform. During this period, you won't have immediate access to your staked crypto assets, meaning you cannot quickly sell or move your investment, even if market conditions are unfavorable. To mitigate this risk, Virtune diligently monitors and analyzes the market to ensure that the staked portion of Virtune's staked ETPs (Exchange Traded Products) maintains adequate liquidity, allowing the ETP to be traded normally at all times.

Slashing is a penalty imposed on crypto assets that are staked with a validator, which can affect the staked funds. This penalty is incurred when a validator engages in actions such as validating incorrect transactions or going offline. The specific reasons and conditions for slashing vary across different crypto assets and blockchain networks. Generally, the penalty involves a reduction of a small percentage of the staked assets. It is important to note that the exact percentage and consequences of slashing can vary depending on the protocol. When engaging in staking, it is crucial to choose a trustworthy and reputable validator. Virtune takes this seriously and exclusively selects established, regulated, and leading staking providers to ensure minimal risk. We ensure minimal slashing risk by partnering with reputable and regulated staking providers such as Coinbase and Figment.

What is slashing?

Slashing is a penalty imposed on crypto assets that are staked with a validator, which can affect the staked funds. This penalty is incurred when a validator engages in actions such as validating incorrect transactions or going offline. The specific reasons and conditions for slashing vary across different crypto assets and blockchain networks. Generally, the penalty involves a reduction of a small percentage of the staked assets. It is important to note that the exact percentage and consequences of slashing can vary depending on the protocol. When engaging in staking, it is crucial to choose a trustworthy and reputable validator. Virtune takes this seriously and exclusively selects established, regulated, and leading staking providers to ensure minimal risk. We ensure minimal slashing risk by partnering with reputable and regulated staking providers such as Coinbase and Figment.

Does staking involve you lending or sending crypto assets to third parties?

What is the difference between custodian and non-custodial staking?

Virtune exclusively uses non-custodial staking. This approach ensures that crypto assets being staked remain securely stored in cold-storage (offline) within our custodian, minimizing theft risks and eliminating reliance on third-party services. The staking process is conducted directly from digital wallets, enhancing security and control. All crypto assets staked by Virtune are consistently kept in cold storage, which is widely recognized as one of the safest methods for crypto assets storage.

Conversely, custodial staking involves users transferring their crypto assets to another entity for staking purposes. This method carries risks such as potential theft, since the crypto assets are managed and stored by someone else. For these reasons, along with regulatory considerations, Virtune does not engage in custodial staking.

How are staking rewards paid out?

How much additional yield does staking generate, and what determines this?

Staking rewards for Proof of Stake crypto assets continuously fluctuate and can be tracked on websites like stakingrewards.com. These rewards vary based on the proportion of all staked crypto assets and other factors. Virtune offers a fixed annual staking yield of 2-4% for several ETPs. In Virtune Staked Ethereum ETP, we stake up to 70% of our ETH holdings and guarantee that at least 75% of these rewards are reinvested in the product and returned to investors.

Can your staked products be bought and sold freely without any lock up periods?

Yes, all our staked products can be freely traded on the market without any lock up period. This is made possible by employing a flexible staking strategy where a portion of the holdings, which varies from 40%-80%, is actively staked, while the remaining part is kept unstaked. This strategy ensures that the products remain liquid and available for trading, while also allowing investors to benefit from the additional returns that staking offers.