Morgan Stanley's ETP Brings ETH Exposure to Mainstream Investors

Morgan Stanley's Ethereum Trust allows investors to buy and hold shares that represent ownership in ETH. The trust holds 50% to 80% of its Ether in Ethereum's validator system, where it earns rewards while exposed to protocol penalties and withdrawal delays.

The advertised 95% reward pass-through applies only to rewards earned on the portion staked by the trust. Validator penalties can reduce the trust's assets and reach shareholders through NAV (net asset value).

Staking providers Figment, Galaxy Blockchain Infrastructure, and Coinbase Canada receive 5% of gross staking rewards, leaving 95% in the trust. The custodians retain private keys that control the trust's assets and withdrawal addresses.