Fidelity's Crypto ETFs Get Staking Authority Up to 100%

Fidelity has given its Ethereum and Solana exchange-traded products (ETFs) the authority to stake up to 100% of their crypto holdings under normal conditions. The FETH and FSOL staking plans, outlined in prospectuses for the Fidelity Ethereum Fund and Fidelity Solana Fund, respectively, also include a layered plan for meeting redemptions when network exits take too long.

The prospectuses, filed on August 21, state that neither fund has a minimum staking requirement. The sponsor, FD Funds Management, can keep ether or SOL unstaked for foreseeable redemptions, expenses, asset protection, and its liquidity program.

FSOL reported having 1,675,797 SOL staked out of 1,687,589 SOL held at June 30, with a fair value of $126.3 million. Its quarterly report put net assets at $127.079 million and its trailing 30-day staked percentage at 99.64%. FETH was at a different point, with a June 30 report listing 476,311 ether and $758.609 million in net assets without a staked-ether line.

The redemption ladder for both funds works as follows: reserves are the first buffer. If they are insufficient and unstaking cannot finish within the standard settlement window, the sponsor may extend settlement temporarily. If an exit still is not practicable within a reasonable extended period, it may deliver cash in place of some or all of the crypto owed in an in-kind redemption.

The timing risk for FETH and FSOL staking differs by network. FSOL expects to regain complete control of its staked SOL within two days under normal conditions, without guaranteeing that result. FETH gives no fixed duration: Ethereum validators must leave the active set and pass a mandatory wait before the network's withdrawal sweep processes them.