Asset management firm Fidelity wants traders of its proposed spot Ethereum exchange-traded fund to be able to stake their assets upon the product’s approval.Per a 19b-4 amendment filed with the United States Securities and Exchange Commission on March 18, Fidelity intends to stake a portion of its spot Ethereum ETF’s assets to receive rewards and generate additional income for users.
“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,” the firm stated. Staking refers to the active participation of crypto users in the operations of a proof-of-stake blockchain by locking up their assets for a certain period to help in transaction validation. The Ethereum network has several staking providers, including StakeWise, Lido DAO, and RocketPool. Crypto exchanges like Binance, Coinbase, and Kraken offer staking services, too.
“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,” Fidelity added.LDO, the native token of Lido DAO, the largest Ethereum staking provider, reacted to the news, briefly spiking 6% from $2.48 to $2.56 before returning to $2.49. At the time of writing, the cryptocurrency was trading at $2.32, down 14% in the past 24 hours.
Fidelity is not the only spot Ethereum ETF applicant that intends to stake a portion of its ether; others like Ark Invest/21Shares and Franklin Templeton have also indicated their plans to stake their funds’ assets.Ark Invest Wants To Add Staking To Its Spot ETH ETF: Will The SEC Approve?One Weekly Email Can Change Your Crypto Life.Disclaimer: Information found on CryptoPotato is those of writers quoted.