Asset management giant BlackRock and crypto exchange Coinbase have disclosed how staking rewards will be distributed in their proposed staked Ethereum exchange-traded fund, according to a newly amended filing submitted to the U.S. regulator.
NEW: updated filing for BlackRock’s @iShares staked Ethereum ETF. Ticker $ETHB. Filing includes expense ratio which will be 0.25%. pic.twitter.com/CW7pKVoJXX
— James Seyffart (@JSeyff) February 17, 2026
The updated document reveals that investors would receive 82% of gross staking rewards generated by the fund, while the remaining 18% would be split between the sponsor and its execution partner. In addition to this cut, shareholders would also pay an annual sponsor fee ranging between 0.12% and 0.25% of assets under management, further reducing net returns.
The structure signals a major step toward institutionalized crypto yield products, offering traditional investors exposure to staking rewards without the technical requirements of running validators or managing wallets directly.
Staking model aims for yield but sparks debate
Under the proposal, between 70% and 95% of the ETF’s holdings could be staked under standard market conditions, with the remaining assets reserved to maintain liquidity and support redemptions. Coinbase would serve as both custodian and prime execution agent, while potentially outsourcing portions of staking operations to third-party infrastructure providers.
The trust has already been seeded with $100,000, representing 4,000 shares priced at $25 each, as preparations continue ahead of a potential launch. With Ethereum staking yields averaging around 3% annually in early 2026, analysts note that investor returns could fall noticeably once fees and revenue-sharing arrangements are applied.
Market appeal and centralization concerns
Market observers say the product could attract institutions looking for passive blockchain income in a regulated format. However, some critics argue that the 18% share retained by service providers may appear steep as competition in crypto ETFs grows.
Concerns about centralization have also resurfaced. Vitalik Buterin recently warned that increasing participation by major financial institutions could gradually shift influence away from decentralized ecosystems. Supporters counter that institutional involvement brings liquidity, stability, and wider adoption to digital assets, suggesting products like this may further bridge traditional finance and crypto markets.
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