Ark 21Shares amends spot ether ETF proposal to include staking language

The addition of the language “marks a potential milestone,” Blockworks research analyst Spencer Hughes said

article-image

Maquette.pro/Shutterstock modified by Blockworks

share

Ark 21Shares amended the S-1 for their spot ether ETF.

Among other changes, including adding a section on potential staking, Ark 21Shares also added similar language to its bitcoin ETF around cash creation. 

The language around staking was added in brackets, which Van Buren general partner Scott Johnsson says means that the issuer wants to add the section, but knows that the Securities and Exchange Commission will want to hold a conversation about it.

Loading Tweet..

“[The Sponsor may, from time to time, stake a portion of the Trust’s assets through one or more trusted third party staking providers (“Staking Providers”). The Sponsor generally expects to stake ether tokens from the Trust’s Cold Vault Balance. In consideration for any staking activity in which the Trust may engage, the Trust would receive certain staking rewards of ether tokens, which may be treated as income to the Trust,” the filing said.

“Staking activity comes with a risk of loss of ether tokens, including in the form of ‘slashing’ penalties. Additionally, as part of the ‘bonding’ and ‘unbonding’ processes of Ethereum staking, any staked ether tokens will be inaccessible for a period of time determined by a range of factors, resulting in certain liquidity risks that the Sponsor will manage.]”

Read more: Blast from the past: 3 years on from the launch of ETH staking

The new language does not appear in earlier S-1s submitted by Ark 21Shares or fellow hopefuls like BlackRock.

“ARK/21Shares amendments pertaining to ETH staking marks a potential milestone for the intersection of [traditional finance] and digital assets. Currently, ~25% of total ETH supply is staked,” Blockworks research analyst Spencer Hughes said. 

“ETH holdings from ETFs could result in exponential growth for the entire staking industry. Further, an increase in institutional ETH staking increases the need for distributed validator technology (DVT) development, which prioritizes validator uptime and geographical distribution,” he continued.

Bloomberg Intelligence analyst Eric Balchunas noted that the other additions to the S-1, as previously mentioned, would ensure that the ETF only includes cash creations. 

The SEC will decide on the spot ether ETFs in May, though there isn’t a consensus on whether or not the decision will be positive. 

Bloomberg Intelligence analyst James Seyffart previously told Blockworks that he puts the odds of approval at 60%

Ben Strack contributed reporting.

Updated Feb. 7, 2024 at 1:02 pm ET: Clarified that language from BlackRock’s spot ether ETF proposal was amended.


Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the Forward Guidance newsletter.

Get alpha directly in your inbox with the 0xResearch newsletter — market highlights, charts, degen trade ideas, governance updates, and more.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.

Tags

Upcoming Events

Javits Center North | 445 11th Ave

Tues - Thurs, March 18 - 20, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

recent research

Research Report Templates.png

Research

An overview of the Base Ecosystem, with a focus on market leaders.

article-image

Although bitcoin hitting $120k by year’s end is looking unlikely

article-image

About 270 million HYPE has been claimed, valued around $7.6 billion

article-image

Stanford professors David Mazières and Dan Boneh will lead the lab alongside a cohort of graduate student researchers

article-image

With more companies holding BTC, bitcoin yielding strategies could become “a new corporate finance norm,” CoinShares posed

article-image

The proposal comes after Polygon governance considered a controversial use of bridged liquidity for yield

article-image

Can the community balance its decentralized ethos with the need for inclusivity and constructive debate?