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Staking-focused exchange-traded funds are poised to enter the U.S. market as Rex Shares secures regulatory approval for its innovative crypto products. The investment firm’s recently filed prospectus reveals plans for two groundbreaking funds – the Rex-Osprey ETH + Staking ETF (ESK) and Rex-Osprey SOL + Staking ETF (SSK) – marking a significant evolution in crypto investment vehicles.
Staking-Centric Design: How These ETFs Balance Yield, Regulation & Efficiency
Staking rewards take center stage in these Nasdaq-listed products, which commit at least 50% of assets to blockchain validation—a first for U.S.-listed crypto ETFs. This hybrid model merges DeFi-like yield generation with the investor protections of traditional finance, including SEC oversight under the 1940 Act framework. By avoiding the SEC’s typical 19b-4 review, the funds achieve faster market entry while still offering institutional-grade custody and reporting.
However, the staking mechanism’s operational nuances reveal tradeoffs: While Cayman Islands subsidiaries sidestep U.S. regulatory friction, investors face C-corp taxation (potentially higher than individual staking tax rates) and management fees exceeding 1%. This structure highlights the industry’s ongoing challenge—delivering crypto-native yields within legacy financial systems without eroding returns.
Passive Crypto Rewards: Opening Doors for Traditional Investors
Staking enthusiasts could gain access to these products within weeks, according to Bloomberg Intelligence analyst James Seyffart. The launch will provide institutional and retail investors alike with a regulated, user-friendly gateway to blockchain rewards, eliminating the technical barriers of running validators or managing private keys.
By packaging validation-based yields within familiar ETF structures, these funds could democratize participation in network participation incentives, attracting capital from investors who previously avoided crypto’s operational complexities. As the market evolves beyond basic spot exposure, reward-generating ETFs may accelerate institutional adoption while setting benchmarks for future crypto-financial hybrids.
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