BlackRock has strengthened the staking stance of its iShares Stake Ethereum Trust ETF (ETHB), outlining plans to allow a large portion of the fund’s ETH to be staked and earned rewards without custody.
In its latest amended filing, the sponsor said that under normal market conditions it will seek to maintain the fund’s ETH stake between 70% and 95%.
The rest is stored in what is called a liquidity sleeve. This is a non-staking buffer designed to handle day-to-day creation, redemption, and expenses.
This change clarifies the intent of the product. The ETHB package incorporates ETH exposure into exchange-traded funds while incorporating the staking of Ethereum within the same ETF structure.
By incorporating staking, this product approaches a carry-oriented strategy where yield forms a core element of expected return.
Staking ambition meets ETF liquidity calculations
ETHB is structured to issue and redeem shares in a basket of 40,000 shares.
The trust primarily stores ETH and facilitates staking through an approved validator arrangement, with Coinbase as its primary enforcement agent.
The goal is to keep the bulk of Ether functional while maintaining the fundamental promise of ETFs: shares that can be created and redeemed in a predictable manner.
That commitment becomes even more difficult when a large portion of your portfolio is at stake. While staked EtherEUM is still an on-chain asset, the process of putting it to work and pulling it up is performed according to Ethereum rules rather than Wall Street settlement expectations.
The filing addresses this tension by formalizing a liquidity plan alongside a 95% staking goal.
The sponsor said it intends to maintain a liquidity sleeve of 5% to 30% of unstaked ETH, sizing dynamically based on expected flows and network conditions.
If buffers are depleted during a high volume of redemptions, BlackRock is considering using cash instead of redemptions, and has also noted the potential for delayed settlement of in-kind redemptions in stressed scenarios.
This is a technical point with practical implications for arbitrage trading. Staking introduces a liquidity clock into the mechanism that aims to match the market price of an ETF with the value of its holdings.
For investors used to thinking of ETFs as clean plumbing, the filing is a reminder that the product is trying to do two jobs at once. Even if you run a staking book that keeps a large portion of your ETH deployed, it should behave like an ETF.
The queue turns into the time it takes to give a bet.
Ethereum staking is not instantaneous. Validators enter and exit through a rate-limited queue designed to protect the stability of consensus.
ETHB’s filing makes its protocol design a key risk factor, as it directly impacts when a fund will begin to earn rewards on newly deposited ethernets.
The prospectus states that staking activation requires joining the activation queue and waiting an additional 4 epochs (approximately 25 minutes) before rewards start accruing. It also states a maximum activation throughput of approximately 57,600 ETH per day.
As of February 5, 2026, the application states that there is an activation queue of approximately 4 million ETH, which will take approximately 70 days.
If ETHB experiences a surge in inflows and attempts to stake a large portion of the newly deposited tokens, a significant portion of the assets could remain in line for weeks before generating staking rewards.
This delay is an important structural feature of products designed to preserve 70% to 95% of their assets. This introduces a launch period where funds are allocated to staking but staking rewards have not yet accrued.
The document also details how things will work going forward.
It outlines withdrawal and withdrawal procedures, including withdrawal delays, withdrawal availability delays of approximately 27 hours, and withdrawal completion which may take approximately 7 to 10 days. He added that during busy times, this process could take weeks or months.
These constraints are most important in scenarios where ETFs are built to withstand rapid price fluctuations or changes in flows.
Investors can buy and sell stocks throughout the day, but the Fund’s ability to adjust stock positions or recover liquidity sleeves after large flows is limited by network queues and timing.
The cost of turning a protocol yield into a regulated wrapper
The ETHB filing also clarifies the economics of staking within the ETF.
The trust pays staking fees. This includes compensation to sponsors and shares of the lead executive agent, and also includes amounts paid to staking providers.
As of the prospectus date, the filing states that these components constitute 18% of the total staking consideration, with the remainder held by the trust.
In addition to staking fees, ETHB charges a traditional sponsor fee of 0.25% per year on net asset value, with 0.12% waived for 12 months on the first $2.5 billion in trust assets.
For crypto-native investors, the fee stack is a central issue.
Returns from staking on Ethereum are not fixed and can vary depending on network participation, fees, and a wide range of staking combinations.
Regulated wrappers make staking accessible through familiar intermediary rails, but can also reduce the portion of rewards that ultimately reach shareholders, before accounting for delays caused by activation queues.
ETHB will generate millions of dollars in revenue for BlackRock
The application’s 95% staking ambitions invite questions, common in traditional finance, from investors about how this will impact fee income if the product scales.
ETHA, BlackRock’s spot ETH ETF, provides a reference point. This is the largest spot Ethereum fund.
As of February 13, 2026, BlackRock’s iShares product page lists ETHA’s net assets as $6.58 billion and 425.4 million shares outstanding.
Also listed is the basket ETH amount of 302.14 ETH per 40,000 share basket. These numbers mean that ETHA holds approximately 3.21 million ETH.
If ETHB were to succeed at half the size of ETHA, its assets under management would be approximately $3.29 billion, and its ETH holdings would be equivalent to approximately $1.61 million.
By using the mechanics outlined in the ETHB application and keeping your assumptions clear, you can envision potential staking economics as a range rather than a single point.
Assume the fund maintains an active stance by contributing 95% of its ETH.
For staking yields, we use two public reference points that summarize recent developments: Coinbase’s estimated ETH staking reward rate of approximately 1.89% APY and ValidatorQueue’s network APR snapshot of approximately 2.84%.
We will use the prospectus ETH price reference of $1,918 as the conversion baseline.
Under these assumptions, half ETHA scale ETHB could generate total staking rewards of approximately 28,800 ETH per year at 1.89% and approximately 43,300 ETH per year at 2.84% in steady state.
Applying the 18% skim pool in the application, the total amount allocated to the sponsor, lead executive agent, and staking provider will be approximately 5,200 ETH per year at 1.89% and approximately 7,800 ETH per year at 2.84%.
Based on $1,918, these numbers equate to approximately $10 million and $15 million.
Sponsorship fees, on the other hand, are easier to calculate.
On assets of approximately $3.29 billion, a sponsorship fee of 0.25% per annum would mean approximately $8.2 million per year after the exemption period. In year 1, if the product qualifies for the 0.12% exemption on the first $2.5 billion, the sponsorship fee would be approximately $5 million.
Putting this all together, the steady-state revenue goal for half the size of ETHA can be built around $11 million to $20 million per year, including sponsorship fees and the assumed share of the staking skim pool.
A new feedback loop between ETF flows and the network
BlackRock’s ETHB filing points out the second-order effects that could be problematic if staking ETFs grow.
Once multiple US-listed funds begin staking at scale, Ethereum activation queues will become market variables alongside Ethereum price and ETF flow data.
A snapshot of the ValidatorQueue shows that there is approximately 3.9 million ETH in the queue, an estimated waiting time of 67 days for entry, and an APR of approximately 2.84%.
In such an environment, the relationship between demand and yield becomes more mechanical. Massive inflows into ETFs chasing staking rewards can lead to long queues and delays in yield realization.
Increased staking participation can put pressure on returns over time, as the same reward flow is distributed across a larger staking base.
The opposite may occur during the risk-off period. While an increase in exits can shorten the entry queue, the same situation can also stress an ETF’s liquidity.
The discussion of alternative cash redemptions and settlement delays in the filing highlights that network congestion and the timing of withdrawals can have a more significant impact when investors prioritize redemption mechanisms.
BlackRock’s plan to stake up to 95% of ETHB’s assets is therefore not simply an addition to yield, but rather a change in the way investors need to value their ETH exposure in an ETF wrapper.