Fidelity amends spot Ethereum ETF to include staking

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Quick Take

Financial giant Fidelity has amended its spot ether ETF application to include provisions for staking the cryptocurrency.
“The Sponsor may, from time to time, stake a portion of the Fund’s assets through one or more trusted staking providers,” the company wrote in an amendment to its ETF application on Monday.

Financial giant Fidelity has amended its spot ether ETF application to include provisions for staking the cryptocurrency.

"According to the Registration Statement, the Sponsor may, from time to time, stake a portion of the Fund’s assets through one or more trusted staking providers, which may include an affiliate of the Sponsor ('Staking Providers')," the company wrote in an amendment to its filing on March 18. "In consideration for any staking activity in which the Fund may engage, the Fund would receive certain network rewards of ether tokens, which may be treated as income to the Fund as compensation for services provided."

The largest of such providers, Lido, currently has $35 billion worth of ether locked.

Since its spot bitcoin ETF was approved in January, Fidelity has amassed about 132,570 bitcoin, worth over $9 billion, in assets for its first spot cryptocurrency exchange-traded product.

Staking is where one actively participates in transaction validation on a proof-of-stake (PoS) blockchain such as Ethereum ETH -4.33% and earns rewards. Thus, a multi-billion dollar player such as Fidelity staking ether could conceivably change the ecosystem of Ethereum itself.

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About Author

Lawrence Lewitinn is the Managing Editor for North America at The Block. Lewitinn brings extensive experience as a financial journalist, with stints at CoinDesk, CNBC, TheStreet, Yahoo Finance, the Observer, and Modern Consensus. His career also includes years on Wall Street, where he traded fixed income, currencies, and commodities for Millennium Management and MQS Capital. Lewitinn is an alumnus of New York University and has earned an MBA from Columbia Business School, along with a Master of International Affairs from Columbia's School of International and Public Affairs. He is a CFA Charterholder.