BlackRock has refined the staking position of its iShares Staked Ethereum Trust (ETHB) ETF, outlining a plan to hold most of the fund’s ETH staked and earn rewards rather than holding it.
In its latest amended filing, the sponsor said that under normal market circumstances it would seek to retain 70-95% of the fund’s ETH.
The rest would be placed in what it calls a Liquidity Sleeve, a non-staked buffer designed to handle creations, redemptions and daily spending.
The change clarifies the intent of the product. ETHB consolidates ETH exposure into an exchange-traded fund while also integrating Ethereum staking into the same ETF structure.
By integrating staking, the product approaches a carry-oriented strategy in which yield constitutes an essential component of expected returns.
Staking Ambition Meets the Math of ETF Liquidity
ETHB is structured to issue and repurchase shares in 40,000 baskets of stocks.
The trust primarily holds ETH in custody and uses a primary execution agent, Coinbase, to facilitate staking through approved validation agreements.
The goal is to keep the majority of ether functional while preserving the ETF’s core promise of stocks that can be created and redeemed in a predictable manner.
This promise becomes more difficult when most of the wallet is staked. Staked EtherEUM is still an on-chain asset, but the staking and withdrawal process follows Ethereum rules, not Wall Street settlement expectations.
The file responds to this tension by formalizing a liquidity plan alongside the 95% stake objective.
The sponsor said it intends to maintain a liquidity margin of between 5 and 30% of unstaked ETH, dynamically sizing it based on expected flows and network conditions.
If the buffer runs out on large redemptions, BlackRock plans to use cash in place of redemptions and also describes the possibility of deferred settlement for in-kind redemptions in stress scenarios.
This is a technical point which has practical significance for arbitration. Staking introduces a liquidity clock into the mechanism intended to keep an ETF’s market price aligned with the value of its holdings.
For investors accustomed to thinking of ETFs as clean plumbing, the filing serves as a reminder that this product tries to do two jobs at once. It must behave like an ETF, even though it operates a staking book that keeps most of its ETH deployed.
Queue turns staking into time to yield
Ethereum staking is not instantaneous. Validators enter and exit via rate-limited queues designed to protect consensus stability.
The ETHB deposit makes the design of this protocol a major risk factor, as it directly affects when the fund can start earning rewards on the newly deposited ether.
The prospectus states that activating staking requires joining an activation queue and then waiting four additional epochs (around 25 minutes) before rewards begin to accumulate. It also shows a maximum activation rate of around 57,600 ETH per day.
As of February 5, 2026, the filing reported an activation queue of approximately four million ETH, which would take approximately 70 days.
If ETHB experiences a surge in inflows and attempts to stake the bulk of newly staked tokens, a significant portion of assets could remain online for weeks before producing staking rewards.
This delay is an important structural feature for a product designed to retain 70-95% of its assets. It introduces a ramp-up period during which the fund is allocated to staking but has not yet generated any staking rewards.
The document also details the exit mechanisms.
It outlines the exit and withdrawal steps which include an exit time, a withdrawal time of approximately 27 hours, and a withdrawal process that may take approximately 7-10 days. He adds that the process can take weeks or even months during times of congestion.
These constraints are most important in the scenarios ETFs are designed for: rapid price movements and changing flows.
Investors can buy and sell shares throughout the day, but the fund’s ability to adjust its stake position or restore its cash reserve after large flows is limited by network queues and timing.
The cost of transforming protocol yield into a regulated wrapper
The ETHB filing also makes explicit the economics of staking within an ETF.
The Trust will pay a staking fee, which includes sponsor remuneration and a share for the lead execution agent, including amounts payable to staking providers.
As of the date of the prospectus, the filing indicated that these components constituted 18% of the gross staking consideration, with the trust retaining the remainder.
Along with these staking fees, ETHB charges a traditional sponsor fee of 0.25% per year on NAV, with a 12-month waiver at 0.12% for the first $2.5 billion in fiat assets.
For native crypto investors, this stack of fees is a central issue.
Returns from staking on Ethereum are not fixed and can vary depending on network participation, fees, and the broader staking mix.
A regulated wrapper can make staking accessible via familiar brokerage rails, but it can also reduce the portion of rewards that ultimately reach shareholders, even before accounting for any delays caused by the activation queue.
ETHB would bring millions in revenue to BlackRock
The filing’s 95% staking ambition invites investors to ask a common question in traditional finance: what does it mean for fee income if the product scales.
BlackRock’s ETH spot ETF, ETHA, provides a reference point. This is the largest Ethereum spot fund.
As of February 13, 2026, BlackRock’s iShares product page listed ETHA with $6.58 billion in net assets and 425.4 million shares outstanding.
It also listed an ETH basket amount of 302.14 ETH per 40,000 shares. These figures imply that ETHA holds approximately 3.21 million ETH.
If ETHB were half as successful as ETHA in terms of size, this would translate to approximately $3.29 billion in assets under management and approximately 1.61 million ETH held.
Using the mechanisms outlined in the ETHB filing and keeping the assumptions explicit, the potential economics of staking can be sketched as a range rather than a single point.
Let’s assume the fund maintains an aggressive posture, with 95% of its ETH staked.
For staking yield, use two public benchmarks that bracket recent conditions, Coinbase’s estimated ETH staking reward rate of approximately 1.89% APY and ValidatorQueue’s snapshot network APR of approximately 2.84%.
We will use the prospectus ETH reference price of $1,918 as our conversion reference.
Under these assumptions, a half ETHA-scale ETHB could generate gross staking rewards, at steady state, of approximately 28,800 ETH per year at 1.89%, or approximately 43,300 ETH per year at 2.84%.
Applying the 18% deposit skimming pool, the total amount allocated to the sponsor, master execution agent, and staking providers would be approximately 5,200 ETH per year at 1.89%, or approximately 7,800 ETH per year at 2.84%.
Using the $1,918 benchmark, these numbers translate to approximately $10.0 million and approximately $15.0 million.
Meanwhile, calculating sponsorship fees is simpler.
On approximately $3.29 billion in assets, an annualized sponsor fee of 0.25% implies approximately $8.2 million per year after the waiver period. In the first year, if the product fully qualifies for the 0.12% exemption on the first $2.5 billion, the sponsor fee would be approximately $5 million.
Overall, a stable revenue target at half the scale of ETHA can be set at around $11-20 million per year, combining sponsor fees with an assumed share of the staking skimming pool.
A new feedback loop between ETF flows and the network
BlackRock’s ETHB filing indicates a second-order effect that could matter if staking ETFs rise.
If multiple US-listed funds begin staking at scale, the Ethereum activation queue becomes a market variable alongside ether price and ETF flow data.
The ValidatorQueue snapshot showed approximately 3.9 million ETH in the queue, with an estimated entry wait of 67 days and an APR of approximately 2.84%.
In this environment, the relationship between demand and output becomes more mechanical. Larger inflows of ETFs seeking staking rewards can lengthen the queue, delaying the realization of yield.
Over time, a larger stake can also put pressure on returns, as the same reward stream is distributed over a larger stake base.
The opposite can happen in times of risk aversion. If outflows increase, entry queues may shorten, but the same conditions can strain ETF liquidity.
The filing’s discussion of cash redemptions and delayed settlements highlights that when investors prioritize redemption mechanisms, network congestion and the timing of withdrawals can become more consequential.
BlackRock’s plan to stake up to 95% of ETHB assets is therefore less of a simple yield addition and more of a change in how investors might need to evaluate exposure to ETH in an ETF wrapper.
