Fidelity Updates Spot Ethereum ETF to Incorporate Staking Services
In Brief
Fidelity applied for a staking service in the registration amendment document of the spot Ethereum ETF to enable traders of its fund to stake assets.
Financial services corporation and mutual fund Fidelity applied for a new staking service in the registration amendment document of the spot Ethereum exchange-traded fund (ETF) to enable traders of its potential Ethereum (ETH) fund to stake some of the assets.
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’).” Additionally, “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.”
One of the largest of such providers is a staking service, Lido, that currently has $35 billion worth of ETH locked.
Staking involves actively participating in transaction validation on a proof-of-stake (PoS) blockchain like Ethereum, which results in earning rewards. Therefore, the involvement of a multi-billion dollar player like Fidelity in staking ETH could potentially impact the Ethereum ecosystem.
Fidelity Awaits SEC Decision on Spot Ethereum ETF Proposal
Fidelity joined the competition to launch a spot Ethereum ETF in November last year. Currently, asset management companies, including BlackRock, Franklin Templeton, Ark Invest and 21Shares, VanEck, and Grayscale, alongside Fidelity, are awaiting the decision of the United States Securities and Exchange Commission (SEC) on the application proposals.
Recently, the SEC extended the timeline for its decision regarding Fidelity’s spot Ethereum ETF proposal. Additionally, the agency announced its intention to gather public input by posing questions regarding the approval of the company’s investment product. One specific inquiry focused on whether Ethereum’s proof-of-stake (PoS) mechanism raised unique concerns about the susceptibility of ETH to fraud and manipulation. The deadline for collecting feedback is set for March 25th.
However, the experts perceive a low likelihood that the SEC will approve spot Ethereum ETFs before the upcoming deadline of May 23rd. Prediction markets on Polymarket currently estimate the likelihood of approval by that date to be 28%, reflecting a significant decrease from the odds of 74% on Polymarket on January 10, when spot Bitcoin ETFs were approved in the United States.
Additionally, last week, Eric Balchunas, Senior ETF Analyst at Bloomberg, revised his expectations of spot Ethereum ETFs getting approved to 30%, down from 70% claimed in January.
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About The Author
Alisa, a dedicated journalist at the MPost, specializes in cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.
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Alisa, a dedicated journalist at the MPost, specializes in cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.
