Fidelity Seeks SEC Approval for Ethereum ETF Staking Amidst Reward Debate
Fidelity has filed with the SEC to allow staking in its Ethereum ETF, the Fidelity Ethereum Fund (FETH), which holds over $898 million in net assets. The fund could stake its entire holdings under normal conditions, without any minimum requirements.
The filing comes at a time when the Ethereum community is facing strong division concerning staking rewards. Proponents of EIP-8363 argue that it will help solve ETH inflation and improve security, while critics argue it could hurt decentralized finance (DeFi) and hamper the 'ETH is productive' capital narrative.
Fidelity stated that the fund will retain 85% of gross staking rewards while the remaining will be treated as staking fees shared among sponsors, custodians, and node operators. Net rewards from the staking activity will first be used to settle the fund's expenses, while the remainder will be distributed quarterly in cash.