Hashdex NCIQ ETF Unveils Staking Structure with Investor Rewards

Asset manager Hashdex has introduced a staking structure for its Nasdaq CME Crypto Index exchange-traded fund (ETF), NCIQ. This structure allows some of the cryptocurrencies held by NCIQ to be used for staking, while the manager takes all net annual staking income up to a certain range.

The key is how income is allocated. Hashdex uses some of the net staking income to cover its own expenses, and only income generated above a threshold of 0.25 percent per year of the net asset value of common shares goes to investors. Specifically, if net staking income reaches 1 percent per year of the common-share NAV, the trust's share for common-share investors is 0.45 percent.

The structure is separate from NCIQ's existing annual management fee of 0.25 percent. Staking has not yet begun, but a Form 8-K filed on July 23 specified that Coinbase Cloud was designated as the initial operator and staking would begin promptly once operational preparations are complete.