Fidelity Proposes Ethereum Staking for FETH Fund
Fidelity has proposed adding Ethereum staking to its FETH fund, which currently has approximately $898 million in net assets. This change would allow the fund to participate in Ethereum's proof-of-stake consensus mechanism and receive staking rewards.
Under normal conditions, FETH could stake up to 100% of its Ether holdings, but the sponsor has discretion over the actual percentage, and there is no minimum requirement. The fund would retain 85% of gross staking rewards, while 15% would cover staking-related fees.
The proposed staking structure introduces validator, liquidity, custody, and tracking risks that do not exist in a purely passive spot product. However, it could reduce the return gap between holding an Ethereum ETF and staking ETH directly.