BlackRock's Ethereum Staking ETF Charges 18% Commission on Staking Rewards

Odaily News: BlackRock's iShares Staked Ethereum Trust (ticker: ETHB) launched on March 12. It has a management fee of 0.25% (with a temporary promotional rate of 0.12%) and also charges an 18% commission on the total staking rewards from the approximately $318 million worth of ETH staked within the trust. This commission is shared between BlackRock and Coinbase.

Based on the current ETH staking yield of approximately 2.74%, the 18% commission translates to roughly 49 basis points of the total return. Falconedge CEO Roy Kashi believes this 18% covers costs such as custody, slashing risk, validator fees, and brand premium. He estimates the operational cost floor for a staking ETF is around 5%. GlobalStake founder Richard Shorten pointed out that there are numerous hidden fees before the rewards even reach the ETF.

Cosmos co-founder Ethan Buchman stated that 18% is not outrageous for an institutional product but expects it to be compressed to 15% or even 10% in the future. Twinstake Sales Vice President Harriet Browning cautioned that excessive fee competition could lead some providers to lower standards in security and transparency. Currently, this commission is still lower than the up to 25% fee retail investors pay for direct ETH staking on major crypto platforms. Financial advisor Tyrone Ross questioned whether it's worth giving up 18% of the staking rewards to BlackRock and Coinbase.