BlackRock Accumulating ETH for New Staked ETF
BlackRock has confirmed it is accumulating ETH for a new staked Ethereum ETF, ticker ETHB. The product will reportedly feature “reward skimming,” where the manager retains a portion of the staking rewards. It may also include exit delays for redemptions, a factor that could impact fund flows and secondary market pricing.
- In addition to the "reward skimming," the ETHB ETF will also have an annual sponsor fee of 0.25%, which will be waived to 0.12% for the first $2.5 billion of the trust's assets for the first 12 months. - BlackRock has officially seeded the iShares Staked Ethereum Trust with a $100,000 initial investment to begin acquiring Ethereum. - The fund plans to stake between 70% and 95% of its total Ethereum holdings, with the remainder kept as a liquidity buffer to manage daily share creations and redemptions. - Coinbase will act as the custodian and prime execution agent for the ETF, and will share in the 18% of staking rewards retained by the fund's management. - The "exit delays" are a function of the Ethereum protocol's native "unbonding" period, a required waiting time when unstaking ETH that can range from days to weeks depending on network congestion. - Competitors in the staked Ethereum ETF space include Grayscale, which already operates two Ethereum ETFs that generate yield through staking (ETHE and ETH), and VanEck, which has also filed to introduce a similar product. - The U.S. Securities and Exchange Commission (SEC) officially approved the listing and trading of spot Ethereum ETFs on July 22, 2024, with trading beginning the following day. - Ethereum co-founder Vitalik Buterin has expressed concerns that a high concentration of staked ETH within large institutional products could lead to the centralization of the network's governance.
