BlackRock Files for Staked Ethereum ETF in Delaware

BlackRock is pursuing two distinct but complementary approaches to capture the growing demand for yield-bearing Ethereum products. The asset manager registered the iShares Staked Ethereum Trust in Delaware on November 19, creating a pathway for a dedicated staked Ethereum ETF. Simultaneously, the firm is working through a separate Nasdaq proposal that would retrofit its existing iShares Ethereum Trust ETF to stake a portion of its ETH holdings through Coinbase Custody. This dual-track strategy demonstrates BlackRock’s commitment to dominating the emerging staked ETH market from multiple angles.

The Delaware trust registration represents a crucial preparatory step rather than a formal Securities Act of 1933 application. This strategic positioning allows BlackRock to be at the front of the queue when the SEC eventually permits staking inside ETF wrappers. The firm’s existing iShares Ethereum Trust ETF (ETHA) currently charges a 0.25% management fee, providing a baseline for how BlackRock might structure pricing for its staked products. The parallel development of both a retrofitted existing fund and a new dedicated trust gives BlackRock flexibility to adapt to whatever regulatory framework emerges.

The fundamental driver behind BlackRock’s push into staked Ethereum products is the significant yield gap facing current ETF investors. When the first wave of US spot Ethereum ETFs launched in 2024, the SEC required issuers to remove staking capabilities, leaving investors unable to access the network’s native rewards. Currently, approximately 30% of Ethereum’s circulating supply is staked on-chain, generating network-level rewards running just under 3% annualized according to reference indices like Compass’s STYETH and MarketVector’s STKR.

This creates a substantial opportunity cost for investors in existing spot ETH ETFs from providers like VanEck, Fidelity, and BlackRock itself. These funds charge management fees ranging from 0.15% to 0.25% but provide no staking yield pass-through to investors. The current ETF landscape essentially forces investors to choose between direct crypto exposure with staking rewards or regulated ETF access without yield. BlackRock’s proposed staked products aim to bridge this divide, potentially allowing investors to capture roughly 2% to 3% annually after fees even if ETH’s price remains flat.

BlackRock enters a market where three distinct staking structures have already emerged, each with different fee models and operational approaches. The REX-Osprey ETH + Staking ETF trades under the ticker ESK as an actively managed 1940 Act fund that stakes at least 50% of its holdings, charging an all-in fee of 1.28%. VanEck has filed for a Lido Staked Ethereum ETF structured as a grantor trust that holds stETH rather than native ETH, representing a different approach to capturing staking rewards.

Fee structures across the competitive landscape reveal significant variation in how sponsors extract value from staking. Grayscale disclosed that its flagship Ethereum Trust can retain up to 23% of staking rewards as additional compensation, while its Ethereum Mini Trust ETF can retain up to 6%. These precedents give BlackRock multiple pricing options for its dedicated staked ETH trust: maintaining its current 0.25% sponsor fee while passing through nearly all staking yield, adding an explicit cut of staking rewards as a second fee layer, or deploying temporary fee waivers to capture market share before normalizing rates.

A staked ETH ETF solves critical distribution problems for institutions, financial advisers, and retirement platforms that cannot access DeFi protocols or lack the operational infrastructure to self-stake. By converting on-chain yield into a total-return line item compatible with 401(k) accounts and model portfolios, BlackRock’s proposed product could fundamentally rewire how traditional investors access Ethereum rewards. The firm appears set to use Coinbase Custody for both ether storage and staking, concentrating all operations inside a single US-regulated counterparty.

Regulatory timing remains the primary uncertainty. The SEC forced issuers to strip staking from the first ETH ETFs because specific staking programs might constitute unregistered securities offerings. Regulators face three open questions: whether they will permit native staking in a 1933 Act commodity trust or require 1940 Act structures; whether they will treat liquid staking tokens like stETH as equivalent to holding underlying ETH; and how much fee extraction from staking they will tolerate before a product crosses into actively managed yield strategy territory.

BlackRock’s single-counterparty model with Coinbase may appeal to regulators compared to structures that route staking through DeFi protocols or multiple service providers. REX-Osprey uses US Bank with external validators, while VanEck’s Lido fund depends on Lido’s smart contracts and a separate stETH custodian. As more ETH migrates into ETF shells, institutional custodians like Coinbase will concentrate an increasing percentage of the network’s staking power, potentially reshaping Ethereum’s decentralization dynamics while bringing institutional-grade security to staking operations.