Hashdex's Nasdaq CME Crypto Index ETF (NCIQ) will begin staking a portion of its crypto holdings, according to a filing this week. The move makes NCIQ one of the first US-listed crypto ETFs to generate yield through staking, a feature that could boost returns for shareholders but also introduces new risks.
How the staking fees break down
The sponsor, Hashdex, will receive 100% of net staking income up to a threshold equal to 0.25% of common-share net asset value per fiscal year. Above that threshold, the split changes: Hashdex gets 40% and the trust (for common shareholders) gets 60%. Provider fees for staking are 8% on Ethereum, 8% on Solana, and 5% on Cardano. The sponsor fee (the 0.25% threshold) is separate from the 0.25% annual management fee of NCIQ.
What NCIQ holds and what it will stake
As of July 26, Ethereum represented 11.75% of NCIQ's holdings, Solana 3.17%, and Cardano 0.49%. The fund's target staking range is 10% to 20% of total NAV. That means a significant portion of its crypto assets could be locked up in staking protocols.
The risks of staking through an ETF
Staking involves risks such as unbonding periods, validator failures, and slashing, which could affect returns. The fee structure is prospective and not a guarantee of returns. For investors, this means the potential yield comes with strings attached — and the fund's performance could be impacted by network issues.
The filing doesn't specify a start date for staking. But with the fee structure now public, the fund is likely to begin staking soon. Shareholders will be watching how the yield — and the risks — play out.
