ETC Group executive hails addition of ETF staking as a positive development

The inclusion of staking in Ethereum exchange-traded fund (ETF) applications is seen as a significant milestone by ETC Group, a European investment firm. Chanchal Samadder, the head of product at ETC Group, emphasized the importance of the Ethereum staking aspect in relation to ETFs, stating that it determines whether investors receive the price return or the total return of the asset. Samadder compared Ethereum’s proof-of-stake mechanism and network rewards to dividends in equities, highlighting that only shareholders who exercise their voting right are eligible to receive dividends. However, Samadder noted that the approval of spot Ethereum ETFs by the Securities and Exchange Commission (SEC) remains uncertain due to the new risks and technical difficulties associated with staking. He expressed concerns that issuers without a deep understanding of the Ethereum protocol and expertise in exchange-traded products (ETPs) could potentially harm investor outcomes. In recent developments, Fidelity and Grayscale Investments have both filed amendments to their SEC applications to include staking in their spot Ethereum ETF proposals. Fidelity seeks permission to stake a portion of Ether assets through trusted providers, while Grayscale mentioned the ability of its fund to stake ETH through a PoS validation protocol. Samadder speculated that the complexity of staking and the SEC’s high-tech and analysis requirements may have initially deterred spot Ether ETF applicants from including staking in their applications. He suggested that there may have been a perception that the SEC was not prepared to adequately assess the risks associated with staking.