NYSE files application to allow staking for Grayscale Ethereum ETF

NYSE Arca, a subsidiary of the New York Stock Exchange (NYSE), has submitted an application to the Securities and Exchange Commission (SEC) to introduce staking functionality for Grayscale's Ethereum (ETH) spot Exchange-Traded Fund (ETF).

According to The Block on the 14th (local time), NYSE Arca submitted the application to the SEC, specifying that "the trust will receive a portion of staking rewards."

If staking functionality is approved, the Ethereum spot ETF will be able to generate additional revenue through its held Ethereum and distribute these earnings to investors in the form of dividends.

While the SEC approved trading of Ethereum spot ETFs last year, it prohibited staking for these ETFs due to potential securities law violations.

In its application, NYSE Arca argued that its staking approach differs from delegated staking and staking-as-a-service models.

NYSE Arca explained, "This staking is performed solely with the Ethereum held by the trust. It can generate reward yields with just a point-and-click approach, limiting additional risks," adding that "enabling the trust to stake Ethereum would allow for better returns for investors."