Fidelity Seeks to Bring Ethereum Staking to $898M Fund

Under the filing submitted to the U.S. Securities and Exchange Commission on August 11, the trust would retain 85% of gross staking rewards. The remaining 15% will be allocated to the sponsor, custodians, and selected node operators, including Blockdaemon, Figment, and Galaxy Digital Trading Cayman. These net rewards are intended to first cover fund expenses, with any surplus distributed to shareholders as cash payments.

Fidelity aims to begin staking as soon as the prospectus takes effect, though the firm maintains the discretion to adjust the amount of ETH committed to validators. To mitigate liquidity risks, the fund will keep a portion of ether available for redemptions and operational needs, relying on a management program that monitors asset availability daily. The strategy aligns with the IRS safe harbor established in November 2025, which allows investment trusts to participate in staking without losing specific tax classifications. While the fund will prioritize in-kind redemptions, the filing provides for cash settlements should validator withdrawal queues or network demand impede liquidity.