Digital asset manager 3iQ today announced a staking option with its two Ethereum exchange-traded fund (ETF) products.
In a Wednesday announcement, the Canadian firm said The Ether Fund and The 3iQ Ether ETF would start offering staking to clients in August—making them the first ETFs in the world to offer such a service.
Staking, in the world of crypto, is the process of “locking-up” cryptocurrency to keep a blockchain’s network running.
Those who hold proof-of-stake assets—like Ethereum (ETH)—pledge it to the network by sending it to a specific blockchain address and can receive rewards for doing so.
“Through staking, the funds will earn rewards in the form of ETH, which will be reflected in the net asset value of the funds through accretive yield while augmenting the funds exposure to ETH,” the announcement explained.
It added that it would use Coinbase’s institutional staking infrastructure to support ETH staking in the products. Earlier this month, the SEC went after Coinbase—the biggest crypto exchange in the U.S.—for allegedly offering and selling unregistered securities via its staking service.
Canadian regulators have not gone after staking products like the SEC has in the States: In February the U.S. Securities and Exchange Commission also fined American crypto exchange Kraken $30 million for allegedly failing to register the offer and sale of its crypto asset staking-as-a-service program.
An ETF is an investment vehicle that tracks the value of an underlying asset, like gold, foreign currencies, or cryptocurrency. Toronto-based 3iQ offers clients ETFs which give investors exposure to ETH, the second biggest digital asset by market capitalization.
3iQ’s two Ethereum-based ETHs are listed on the Toronto Stock Exchange and are therefore available to Canadian investors—not American ones.
