Today’s The Day - More News on the ETH ETF Applications

TL;DR

• Even though staking is a key part of Ethereum, the ETH ETF providers will not stake their ETH holdings.

Full Story

It wouldn’t be ‘ETH ETF approval/denial deadline day’ without mentioning the ETH ETFs.

So here goes (with a unique angle).

Staking is one of the fundamental concepts of crypto (and Ethereum in particular).

It’s the idea that you can lock up your crypto, which helps secure the network, and in return you earn ‘staking rewards’ aka ‘interest.’

So, if all of these ETH ETF’s are approved, and they suddenly start buying and holding a ton of ETH, will they be staking it?

Short answer: no.

Here’s what was announced on Tuesday by Cboe (i.e. the exchange that plans to list spot ETH ETFs by Fidelity, Franklin Templeton, Ark Invest, Invesco and VanEck):

“Neither the trust, nor the sponsor, nor the custodian, nor any other person associated with the trust will, directly or indirectly, engage in action where any portion of the trust’s ETH becomes subject to the Ethereum proof-of-stake validation or is used to earn additional ETH or generate income or other earnings,”

So it sounds like it’s off the table - which makes sense given that the ETF providers will need to buy and sell ETH as soon as their customers buy and sell it (they can’t risk having it locked up).

This may have been a sticking point for approval which the ETF providers were only informed of recently, hence the amendments to the proposals.

Seems like, even though staking is an option for ETH, the ETH ETF will operate in pretty much the same way as the BTC ETF does - helping investors invest in crypto, without directly holding crypto.

Here’s hoping we get some good news today!