Fidelity Moves to Add Staking Rewards to Its Ethereum ETF

Fidelity is preparing to turn its Fidelity Ethereum Fund (FETH) into a yield-generating investment product. The firm has filed an amended registration statement with the U.S. SEC seeking permission to stake up to 100% of the fund’s ETH holdings and pass the resulting net rewards to shareholders through quarterly cash distributions.

The filing is still preliminary, so the changes cannot begin until the registration statement becomes effective.

How FETH’s Staking Model Would Work

FETH held about $898 million in net assets at the time of the filing. Under normal conditions, Fidelity could stake nearly all of its ETH while keeping enough available for redemptions, expenses and other liquidity needs.

The proposed reward structure is straightforward:

• FETH would keep 85% of gross staking rewards.
• The remaining 15% would be shared among Fidelity, custodians and staking operators as fees.
• Net rewards would first cover fund expenses.
• Any amount left could be distributed to investors quarterly in cash.

Fidelity says staking could begin “as soon as practicable” after the registration becomes effective. However, payouts would not be guaranteed, and the fund could sell ETH to generate cash for distributions.