BlackRock and Coinbase plan to take an 18% share of staking rewards from BlackRock’s proposed Ethereum staking exchange-traded fund (ETF), according to an amended S-1 filing submitted to the U.S. Securities and Exchange Commission on Feb. 17.
Under the structure outlined in the filing, ETF investors would receive 82% of gross staking rewards, while the remaining 18% would go to the fund sponsor and its execution partner.
In addition, shareholders would pay an annual sponsor fee ranging from 0.12% to 0.25% of assets, separate from the staking reward split.
How the staking model would work
The ETF would stake a substantial portion of its Ethereum holdings:
- 70% to 95% of the fund’s Ethereum (ETH) would typically be staked
- The remainder would be held in liquid form to meet redemptions and operational needs
Coinbase would serve as custodian and prime execution agent through its institutional services arm. It may share part of its allocation with third-party validators and infrastructure providers involved in the staking process.
BlackRock has already seeded the trust with $100,000, equivalent to 4,000 shares at $25 each, and is reportedly building its Ethereum position ahead of a potential launch.
Based on early 2026 network data, Ethereum staking yields have averaged around 3% annually. After the 18% reward split and sponsor fees, the net yield to investors would be lower and dependent on network conditions and participation rates.
Market positioning
The proposed product would act as a yield-generating extension of BlackRock’s existing Ethereum spot ETF offerings. Following the strong uptake of its crypto ETFs, including exposure to Bitcoin, BlackRock has become one of the dominant players in regulated digital asset investment products.
Nasdaq has applied to list the staked ETF, signaling continued institutional support for regulated crypto yield strategies within traditional financial markets.
Debate: Access vs. centralization
Supporters argue the structure gives institutional investors access to blockchain-based yield without the operational complexity of managing wallets or validator infrastructure.
Critics, however, question:
- Whether an 18% cut of staking rewards is excessive as ETF competition grows
- Whether large asset managers accumulating staked ETH could increase centralization risks
Notably, Vitalik Buterin recently cautioned that expanding Wall Street participation in Ethereum could raise long-term centralization concerns.
The proposal highlights a broader tension in crypto markets: institutional integration may increase liquidity and legitimacy — but it may also shift influence toward large financial intermediaries.
