Fidelity is preparing to launch staking and quarterly payouts for its ether ETF (FETH), one of the largest in the U.S. with assets totaling $898 million. The fund will be able to stake up to 100% of its ether, while reserving a portion for share redemptions.
This became possible thanks to an IRS clarification that allows crypto trusts to stake assets without losing their tax benefits. Fidelity will join Grayscale and 21Shares, which have already done this earlier. BlackRock has chosen a different approach and launched a separate product with staking capabilities.
Fidelity will keep 85% of the staking revenue, with the remainder going to service providers. The revenue will first cover the fund’s expenses and then be distributed as quarterly payouts to holders.