Fidelity OKs 100% Staking for Two Crypto Funds Amid Proof-of-Stake Trend

Fidelity has expanded its crypto offerings by allowing two of its exchange-traded products to stake up to 100% of their assets. This move, announced in an August 21 prospectus, enables fund sponsors to lock up cryptocurrency holdings and earn yields as compensation for the lock-up.

The process involves unit holders not directly staking themselves but through their fund sponsors. There is no minimum staking requirement for both products under normal market conditions. The authority applies as a ceiling, not necessarily indicating that both funds are fully staked.

FSOL, one of the two funds, has already shown significant staking activity with 1,675,797 SOL out of 1,687,589 held as of June 30. Its fair value was recorded at US$126.3 million with net assets of US$127.079 million. The last 30-day staking ratio reached 99.64%.

FETH, the other fund, is at a different point in its staking process. As of June 30, it listed 476,311 ether with net assets of US$758.609 million. However, no line records the amount of ether staked. Fidelity changed its trust and custody arrangements in August, stating that staking will begin as soon as possible after August 21.

The distribution of yields from staking is regulated with fixed proportions: 15% for associated fees and 85% for the fund. This portion can be used for fund fees and quarterly cash distributions, including redemptions and additional staking. Distributions are not guaranteed and may be changed or discontinued.