Fidelity Seeks to Add Staking to Ethereum ETF, Plans Quarterly Cash Payouts
Summary
- Fidelity said it filed an amended registration statement with the SEC to allow up to 100% staking of the Ether held by its Ether ETF, FETH.
- Fidelity said 85% of staking rewards would accrue to the ETF, while 15% would be paid to the custodian and node operators.
- Net staking rewards would first cover fund operating expenses, with the remainder used for cash distributions. Fidelity said it may sell some Ether if needed.
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Fidelity Investments is seeking to add staking to its spot Ether exchange-traded fund.
CoinDesk reported on August 12 that Fidelity recently filed an amended registration statement with the US Securities and Exchange Commission to allow FETH, its spot Ether ETF, to stake as much as 100% of the Ether it holds.
The filing did not specify a minimum staking ratio. Fidelity said it plans to keep some Ether unstaked to meet liquidity needs, including redemptions and fund expenses.
Grayscale and 21Shares have already added staking features to their Ether ETFs. BlackRock launched a separate staking Ether ETF instead of adding staking to an existing fund.
Fidelity plans to allocate 85% of staking rewards to the ETF. The remaining 15% would be paid to parties including the custodian and node operators. The filing named Blockdaemon, Figment and Galaxy as node operators for the ETF.
Net staking rewards would first be used to cover fund operating expenses. Any remaining amount would be paid out as cash distributions. Fidelity said it may sell some Ether if needed to fund those payouts.
JOON HYOUNG LEE
gilson@bloomingbit.ioCrypto Journalist based in Seoul