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BlackRock’s Ethereum ETF aims for aggressive staking

BlackRock has sharpened the staking posture for its iShares Staked Ethereum Trust ETF (ETHB), outlining a plan to keep most of the fund’s ETH staked and earning rewards rather than held in custody.

In its latest amended filing, the sponsor said that under normal market circumstances, it would seek to keep 70% to 95% of the fund’s ETH staked.

The remainder would sit in what it calls a Liquidity Sleeve, an unstaked buffer designed to handle day-to-day creations, redemptions, and expenses.

The change clarifies the product’s intent. ETHB packages spot ETH exposure into an exchange-traded fund while also incorporating Ethereum staking within the same ETF structure.

By embedding staking, the product moves closer to a carry-oriented strategy in which yield forms a core component of expected returns.

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Staking ambition meets ETF liquidity math

ETHB is structured to issue and redeem shares in 40,000 share baskets.

The trust primarily holds ETH in custody and uses a prime execution agent, Coinbase, to facilitate staking through approved validator arrangements.

The goal is to keep the majority of ether working while preserving the basic ETF promise, shares that can be created and redeemed in a predictable way.

That promise becomes more difficult when most of the portfolio is staked. Staked EtherEUM is still an on-chain asset, but the process of putting it to work and pulling it back out runs on Ethereum’s rules, not Wall Street’s settlement expectations.

The filing addresses that tension by formalizing a liquidity plan alongside the 95% staking target.

The sponsor said it intends to maintain a Liquidity Sleeve of 5%-30% of unstaked ETH, sizing it dynamically based on expected flows and network conditions.

If the buffer is depleted during heavy redemptions, BlackRock contemplates using cash in lieu of redemptions, and it also describes the possibility of delayed settlement for in-kind redemptions in stressed scenarios.

That is a technical point with a practical meaning for arbitrage. Staking introduces a liquidity clock into the mechanism intended to keep an ETF’s market price aligned with the value of its holdings.

For investors used to thinking of ETFs as clean plumbing, the filing is a reminder that this product is trying to do two jobs at once. It must behave like an ETF, even as it operates a staking book that keeps most of its ETH deployed.

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The queue turns staking into time to yield

Ethereum staking is not instant. Validators enter and exit through rate-limited queues that are designed to protect consensus stability.

ETHB’s filing makes that protocol design a headline risk factor because it directly affects when the fund can begin earning rewards on newly deposited ether.

The prospectus notes that staking activation requires joining an activation queue and then waiting an additional four epochs (about 25 minutes) before rewards begin accruing. It also lists a maximum activation throughput of roughly 57,600 ETH per day.

As of Feb. 5, 2026, the filing cited an activation queue of roughly four million ETH, which would take approximately 70 days.

If ETHB experiences a surge of inflows and attempts to stake the bulk of newly deposited tokens, a meaningful portion of the assets could remain in line for weeks before producing staking rewards.

That delay is a material structural feature for a product designed to keep 70% to 95% of its assets staked. It introduces a ramp-up period in which the fund is allocated for staking but has yet to generate staking rewards.

The document also spells out the mechanics on the way out.

It outlines exit and withdrawal steps that include an exit delay, a withdrawability delay of approximately 27 hours, and a withdrawal sweep that can take approximately 7 to 10 days. It adds that the process can take weeks to months during periods of congestion.

Those constraints matter most in the scenarios ETFs are built to withstand: fast price moves and shifting flows.

Investors can buy and sell shares throughout the day, but the fund’s ability to adjust its stake position or restore its liquidity sleeve after large flows is constrained by the network’s queues and timing.

The cost of turning protocol yield into a regulated wrapper

ETHB’s filing also makes the economics of staking inside an ETF explicit.

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The trust will pay a Staking Fee, which includes remuneration for the sponsor and a share for the prime execution agent, including amounts payable to staking providers.

As of the prospectus date, the filing stated that those components constitute 18% of the gross Staking Consideration, with the trust retaining the remainder.

Alongside that staking fee, ETHB charges a traditional sponsor fee of 0.25% annually on net asset value, with a 12-month waiver to 0.12% for the first $2.5 billion of trust assets.

For crypto native investors, that fee stack is a central question.

Staking returns on Ethereum are not fixed and can vary with network participation, fees, and the broader staking mix.

A regulated wrapper can make staking accessible through familiar brokerage rails, but it can also reduce the portion of rewards that ultimately reaches shareholders, even before considering any delay caused by the activation queue.

ETHB would pull in millions in revenue for BlackRock

The filing’s 95% staking ambition invites an investor question that is common in traditional finance, what does this mean for fee revenue if the product scales.

BlackRock’s spot ETH ETF, ETHA, provides a reference point. This is the largest spot Ethereum fund.

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