Fidelity Investments has filed to add staking capabilities and quarterly cash distributions to its ether exchange-traded fund, a move that could reshape how the roughly $900 million product delivers returns to investors.
What Fidelity Is Proposing
The asset management giant is seeking regulatory clearance to stake a portion of the ether held within its ETF, allowing the fund to earn additional yield from securing the Ethereum network. Under the proposed structure, the fund would retain 85% of the gross staking rewards generated, passing those benefits to shareholders. The remaining 15% would be allocated to service providers responsible for facilitating the staking operations.
If approved, investors would receive quarterly cash payouts derived from the staking activity, giving the product a passive income component that most spot ether ETFs currently lack.
Staking could transform a passive ether ETF into a yield-generating instrument for everyday investors.
Why It Matters
Staking has long been viewed as a key advantage of holding ether directly, since network participants can earn rewards for helping validate transactions. Until now, most U.S.-listed ether ETFs have been unable to capture that yield, leaving a gap between owning the funds and holding the underlying asset on-chain.
Fidelity's push signals growing confidence among major issuers that regulators may be more open to approving staking within regulated fund wrappers. Should the filing succeed, it could pressure competing ether ETF providers to introduce similar features to remain attractive to investors.
Key elements of the proposal include:
- Retention of 85% of gross staking rewards for the fund
- A 15% cut for service providers
- Quarterly cash distributions to shareholders
The outcome now rests with regulators, whose decision could set a precedent for how staking is handled across the broader crop of crypto ETFs.