For investors who want exposure to Ethereum without handling private keys or running validators, the latest move from BlackRock offers something familiar in form but new in function. The asset management giant has updated its regulatory filing to show that it plans to stake a large portion of the Ethereum held in its proposed ETF, allowing the fund to generate yield directly from the network.
But that yield will not flow entirely to shareholders. Under the structure disclosed, BlackRock and its execution partner will retain 18 percent of the staking rewards, leaving investors with 82 percent before other fees are applied.
The amended S-1 filing submitted to the U.S. Securities and Exchange Commission outlines how the model will work in practice. Between 70 percent and 95 percent of the fund’s Ethereum holdings would be staked under normal market conditions, with the remainder held back to meet liquidity needs and potential redemptions. Coinbase is set to serve as both custodian and prime execution agent through its institutional arm, and may share part of its portion of the rewards with third-party validators that help operate the staking infrastructure.
David Adubiina
The Economics Behind the Structure
Ethereum staking yields have generally hovered around 3 percent annually, according to recent network data, though returns fluctuate with total participation and on-chain activity. After the 18 percent allocation to the sponsor and execution partner, and on top of an annual sponsor fee ranging from 0.12 percent to 0.25 percent, the effective yield for investors would be lower than the headline network rate. For institutions accustomed to layered fee structures in traditional ETFs, this may not be surprising. Still, in the competitive race for crypto ETF inflows, the split is likely to draw scrutiny.
BlackRock has already seeded the trust with $100,000, representing 4,000 shares at $25 each, signaling preparation ahead of a potential launch. The filing comes as regulated crypto investment vehicles continue to gain traction following the approval of spot Bitcoin and Ethereum ETFs. Exchange operator Nasdaq has applied to list the staked version of the product, indicating growing institutional appetite for blockchain-based yield within a familiar wrapper.
Institutional Access Meets Decentralization Debate
A staking-enabled ETF lowers the barrier for pensions, asset managers, and corporate treasuries to access blockchain rewards without operational complexity. Instead of managing wallets or worrying about slashing risks, investors would gain exposure through brokerage accounts, just as they do with equity or commodity funds. In that sense, the product responds to a clear market demand: yield with minimal friction.
But the structure also feeds into a broader debate about the concentration of influence on Ethereum. Co-founder Vitalik Buterin has previously warned about the long-term risks of staking power becoming too centralized in the hands of large financial institutions. However, Buterin has also famously defended the protocol’s "permissionless" nature, even when used for institutional products he might personally dislike.
In a 2026 post on X, he addressed the tension between decentralized values and corporate adoption- "The whole concept of 'permissionlessness' and 'censorship resistance' is that you are free to use Ethereum in whatever way you want, without caring about what I think... Neutrality is for protocols (like HTTP, like Bitcoin, like Ethereum)... But on the flipside, if I say that your application is corposlop, I am not 'censoring' you."
For now, the proposal reflects a broader shift in crypto markets. The conversation is no longer just about price exposure. It is about how traditional finance integrates directly into blockchain mechanics, and how revenue generated at the protocol level is divided once it flows through regulated products.
Jemi Motesho
