In a significant move within the race for spot Ethereum ETFs, asset management giant BlackRock has substantially lowered the proposed staking fee for its iShares Ethereum Trust (ETHB). An updated S-1 filing submitted to the U.S. Securities and Exchange Commission (SEC) reveals the fee has been reduced from 18% to 10% of the staking rewards generated by the fund's holdings.
The revised filing, spotted by Bloomberg ETF analyst James Seyffart, outlines the new fee structure which applies specifically to the income from staking, not the fund's total net asset value. Seyffart noted on social media platform X that the fund may also introduce tiered fee discounts as it accumulates more assets, though specific thresholds were not disclosed.
This development is part of the final regulatory review process, following the SEC's approval of 19b-4 proposals for several spot Ethereum ETFs in May 2024. Issuers like BlackRock, Fidelity Investments, Grayscale Investments, and Franklin Templeton are now awaiting effectiveness for their S-1 filings to begin trading. The updated fee is seen as a competitive measure, as earlier filings from Franklin Templeton referenced staking fees as high as 15%.
The proposed ETF model is distinct from simple spot holdings, as it plans to actively stake its Ethereum to help secure the network and generate additional yield for investors. This comes at a time of record-high staking demand, with over 37 million ETH (30.6% of the circulating supply) staked and a validator entry queue holding over 3 million ETH.
However, the bullish staking narrative faces a counter-warning from Culper Research. The trading firm argues that recent Ethereum network upgrades, like Fusaka, have lowered validator tips and contracted overall staking yields. They claim this decrease undermines institutional adoption and has led them to take a short position on ETH, citing a decline in active validators as a sign of a potential crisis in staking demand.
Ethereum co-founder Vitalik Buterin has countered this view, stating that upcoming upgrades will reduce operating costs for validators, which could be a net positive. As the regulatory process continues and these competing narratives play out, ETH's price has been consolidating near $2,000, with technical indicators suggesting a potential volatile breakout.
