In a decisive move that signals the next evolution of crypto investment products, BlackRock has officially filed the final terms for its highly anticipated iShares Staked Ethereum Trust (ticker: ETHB). The amended SEC filing, submitted late Tuesday, reveals a two-tiered cost structure that marks a pivotal transition for the U.S. ETF market: a 0.25% annual sponsor fee and a definitive plan to retain 18% of all staking rewards generated by the fund. This development, cementing a deeper partnership with Coinbase as the primary staking infrastructure provider, officially kicks off the institutional race for Ethereum yield in 2026.
Breaking Down the Fee Structure: 18% Reward Cut Explained
For institutional and retail investors alike, the headline news is the fee model. Unlike the first generation of spot crypto ETFs which competed solely on expense ratios, BlackRock’s new staked product introduces a performance-based component. According to the S-1 amendment, the fund will deduct an 18% cut from the gross staking rewards before distributing the remaining 82% to shareholders. This "staking fee" is split between BlackRock and its execution agent, Coinbase Prime.
On top of this reward deduction, investors will pay a standard 0.25% annual sponsor fee based on the fund's Net Asset Value (NAV). However, in an aggressive bid to capture early market share from rivals like Grayscale, BlackRock is offering a temporary waiver: the fee will drop to 0.12% for the first $2.5 billion in assets during the first 12 months of trading. With current Ethereum network staking yields hovering around 3%, analysts estimate the net yield to investors—after the 18% cut and sponsor fees—will land closer to 2.4%, offering a regulated alternative to direct on-chain staking.
From Price Action to Institutional Yield
The launch of ETHB represents a fundamental shift in how Wall Street packages cryptocurrency. While BlackRock’s existing spot ETF, the iShares Ethereum Trust (ETHA), has successfully gathered over $9.1 billion in assets by strictly tracking price action, it left substantial value on the table by leaving tokens dormant. The new staked trust aims to capture that missed opportunity, transforming Ethereum from a passive speculative asset into a productive, yield-bearing instrument.
"This is the moment the 'Yield War' officially begins," says a senior ETF analyst. "Investors are no longer satisfied with just price exposure; they want the native yield that the Ethereum network provides. BlackRock's entry validates staking as a legitimate income strategy for traditional portfolios."
Liquidity Management and the 70-95% Staking Ratio
One of the critical technical details revealed in the filing is BlackRock's approach to liquidity. To ensure the fund can meet daily redemption requests without friction, the trust will not stake 100% of its holdings. Instead, it plans to stake between 70% and 95% of its Ethereum assets.
The remaining 5% to 30% will be held as "unstaked" liquid inventory. This buffer is essential because Ethereum staking withdrawals can take days to process due to the network's exit queue. By maintaining a liquid reserve, BlackRock mitigates the risk of a liquidity crunch during periods of high volatility, ensuring that institutional investors can exit positions swiftly without waiting for validators to unbond.
Coinbase's Role in Staking Infrastructure
The filing further solidifies Coinbase's dominance as the backbone of the U.S. crypto ETF market. Serving as the Prime Execution Agent, Coinbase will manage the complex technical operations of running validators and securing the staked ETH. The 18% staking fee will be shared with Coinbase, providing the exchange with a lucrative new revenue stream independent of trading volume.
This partnership addresses a key concern for the SEC: operational security. By utilizing Coinbase's institutional-grade staking infrastructure, BlackRock assures regulators that the technical risks associated with slashing (penalties for validator downtime) are professionally managed, making the product palpable for risk-averse wealth managers.
The Competitive Landscape in 2026
BlackRock is not entering a vacuum. Grayscale fired the first shot in January 2026 by distributing the first-ever staking rewards to investors, albeit with a different fee structure. With Fidelity and Franklin Templeton also advancing their own staked Ethereum filings, the market is bracing for fierce competition. However, BlackRock's aggressive fee waiver and massive distribution network place ETHB in a prime position to dominate this emerging asset class, much like it did with spot Bitcoin and Ethereum ETFs.
