The CBOE BZX Exchange has filed a request to allow staking of the Ethereum Fund (FETH) loyal to the U.S. Securities and Exchange Commission (SEC) as revealed in its March 11 filing.
Staking involves locking ETH to secure the Ethereum network while generating rewards. Stained ETFs, if approved, could provide additional income to investors beyond traditional spot Ethereum ETFs.
The filing highlights strengthening investors’ returns, streamlining the fund creation and redemption process, and improving overall efficiency, and outlines the benefits of staking.
According to submission:
“When a trust allows the trust to wager ether, it will benefit investors and help the trust to better track the returns associated with holding ether. This will improve the creation and redemption process for both licensed participants and trust, improving efficiency and ultimately benefiting the trust for the final investor.”
This submission also establishes strict staking guidelines, such as:
- Only ETH held by the fund will be piled down, and there will be no pooling of assets from external entities.
- Sponsors do not advertise staking services, guarantee returns, or recruit stakes from third parties.
- Staking helps protect the fund’s assets, contribute to network security and generate shareholder returns.
This filing is no surprise. Players from several industries are pushing for stakes on integration into ETFs, claiming that investors can benefit from network-native capabilities while enhancing blockchain security.
In a recent submission to the SEC, Solana-focused infrastructure companies Jito Labs and Multicoin Capital noted that staking Exchange-Traded products (ETPs) can provide structural benefits and attract investors’ interest.
The company states:
“Limiting staking on Crypto Asset ETPS (i) robs investors of potential returns by impairing the productivity of the underlying asset, and (ii) robs network security by not stakering a significant portion of the asset’s distribution supply.”
Meanwhile, the proposal comes as Ethereum ETF faces a wave of investor withdrawal. Over the past four days, funds have recorded more than $140 million outflows, reflecting ongoing market challenges.
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