Overview
- Fidelity filed a pre‑effective amendment on Aug. 11 that would allow the Fidelity Ethereum Fund (FETH) to stake the ether it holds and to pay quarterly cash distributions funded by staking income.
- Under the proposal the trust could stake as much as 100% of its ETH under normal conditions with no minimum required while keeping reserves for redemptions and expenses.
- Fidelity would retain 85% of gross staking rewards and allocate a 15% service fee to the sponsor, custodians and node operators with Blockdaemon, Figment and Galaxy named as intended validators.
- Staking rewards would accumulate in ETH then be sold into U.S. dollars for quarterly payouts after covering fund expenses and liabilities, and the fund may also sell ETH holdings to meet distributions.
- The plan rests on the Treasury/IRS Revenue Procedure 2025‑31 tax safe harbor and reflects a wider industry shift by managers such as Grayscale and BlackRock, but staking will not start until the SEC makes the filing effective and operational steps are complete.