BlackRock and Coinbase plan to take an 18% share of staking rewards from BlackRock’s proposed Ethereum staking exchange-traded fund, according to an updated regulatory filing.
Summary
- BlackRock and Coinbase will take 18% of ETH ETF staking rewards.
- Between 70% and 95% of the fund’s Ethereum would be staked, with Coinbase serving as custodian and execution agent.
- Supporters see institutional yield access as positive, while critics warn about fees and centralization risks.
The firms disclosed the fee structure in an amended S-1 filing with the U.S. Securities and Exchange Commission on Feb. 17. According to the filing, investors will receive 82% of gross staking rewards, with the fund sponsor and its execution partner receiving 18%.
A sponsor fee that ranges from 0.12% to 0.25% of the investment value will be paid by shareholders each year in addition to the staking fee.
How the staking model will work
Under the proposed structure, most of the fund’s Ethereum (ETH) holdings will be used for staking. The filing says between 70% and 95% of assets may be staked under normal conditions, with the rest kept available for liquidity and redemptions.
Coinbase will act as the prime execution agent and custodian through its institutional services unit. The company may also pass part of its share to third-party validators and infrastructure providers involved in the staking process.
BlackRock has already seeded the trust with $100,000, equal to 4,000 shares priced at $25 each. The firm is also building its Ethereum position ahead of a potential launch.
Based on early 2026 network data, Ethereum staking yields have averaged close to 3% annually. After the 18% cut and other fees, the effective return for investors is expected to be lower, depending on market conditions and network participation.
Market reaction and centralization concerns
The fund is a yield-generating variant of BlackRock’s current Ethereum spot ETF, which has garnered significant institutional interest since its inception. After the success of its Bitcoin (BTC) and Ethereum products, the company has established itself as a significant player in digital asset ETFs over the last two years.
Nasdaq has already applied to list the staked, indicating growing support for regulated crypto yield products in traditional markets.
Some analysts say the structure could appeal to investors seeking exposure to blockchain rewards without managing wallets or validators. Others have questioned whether an 18% share of staking income is too high, especially as competition in the ETF space increases.
Concerns have also been raised about the concentration of influence. In the same week as BlackRock’s filing, Vitalik Buterin warned that growing Wall Street involvement in Ethereum could increase centralization risks over time.
Supporters argue that institutional products help bring liquidity and legitimacy to the market. Critics say they may shift too much control toward large financial firms.