Hashdex's Crypto ETF Offers Unique Staking Rewards Structure

Hashdex's new crypto ETF, NCIQ, has set up a staking-income waterfall that rewards its holders. The sponsor takes the first slice of net income, while common shareholders begin sharing in the rewards after an annual threshold is cleared.

The framework is prospective and was announced on July 23 through a Form 8-K filing with Coinbase Cloud as the initial provider. Staking is expected to begin promptly once operational readiness is achieved.

Under the staking waterfall, Hashdex retains its portion of gross rewards from the provider, followed by all remaining net staking income up to 0.25% of common-share NAV through a Sponsor Share held exclusively by Hashdex.

Income above this threshold is split 40% to Hashdex and 60% to the trust for holders of publicly traded NCIQ common shares. This threshold is measured over each fiscal year, prorated for a partial year if necessary.