Fidelity Adds Staking Program to FETH ETF, Distributions to Follow
Fidelity Investments has made significant changes to its FETH spot Ethereum ETF by incorporating a staking program that will distribute quarterly cash rewards to shareholders. This move is historic, as it marks the first time a nearly $900 million fund has been structured to generate yield rather than simply tracking ETH's price.
The amended registration statement, accepted by the SEC on July 24, 2026, and made publicly available on EDGAR on August 10, includes a staking program that will stake up to 100% of the fund's ether holdings under normal market conditions. Three institutional validators, Blockdaemon, Figment, and Galaxy Digital Trading Cayman, will run the validator nodes while Fidelity's custodians retain exclusive control of all private keys.
The fund will earn gross staking rewards from Ethereum's proof-of-stake network, with 85% retained for shareholders. The remaining 15% covers a flat staking fee shared among Fidelity's sponsor entity, its custodians, and the three node operators. Net rewards will be sold for cash and distributed to shareholders at least quarterly.
The staking income is denominated in ETH, which Fidelity will sell and convert to cash before each quarterly payment date. This means shareholders receive dollars, not ether, a design that simplifies taxes but also makes payouts fluctuate with ETH's market price.