# Ethereum staking ETFs Source: https://www.danielmcglynn.com/ethereum-staking-etfs Kiwi News: https://news.kiwistand.com/stories/Ethereum-staking-ETFs?index=0x67b2368564bc69c428da66d8f02b5b9a9ea3a1ab091c23ce8551099ef512d6ddfc23fd90 Submitted by danielmcglynn.eth on 2025-02-16 UTC, 1 upvote, 0 comments ## Summary Daniel McGlynn argues that Ethereum staking ETFs combine traditional fund structures with proof-of-stake yield, making them a new hybrid between Open Money and centralized finance. Two Ethereum ETF managers have filed with the SEC to allow staking within their funds: 21Shares submitted its filing on February 12, and Grayscale Investments filed via the New York Stock Exchange the following Friday. The article notes that staking yields fluctuate, so funds cannot guarantee any yield. McGlynn writes that the 21Shares filing cites the ability for investors to participate in protocol governance through a "point and click style staking approach." ## Article Marketing recommendation: Hold bags. Earn yield. Things got interesting in institutional crypto land this week when two Ethereum exchange traded fund (ETF) managers filed for approval from the SEC to allow staking from right within the fund. On February 12, 21Shares Core Ethereum ETF managers submitted a filing to the SEC to introduce staking activities. On Friday, Grayscale Investments, via the New York Stock Exchange, filed for approval from the SEC to stake ETH in its ETFs. Ethereum’s staking yields fluctuate, so funds can’t guarantee any yield. Here’s what performance looked like over the past few years. SOURCE This development is interesting for fund managers because it combines old-school investing tactics with more avant-garde financial functionality (making money while staking a decentralized consensus mechanism). It’s also interesting for investors because they can now earn yield while holding bags in a more straightforward investing environment. Or, put another way, a whole new crop of “stakers” can participate within a more suit-and-tie environment. The potential of creating a traditional fund for proof-of-stake protocols is likely to catch the attention of other blockchain builders. The ability to capitalize on institutional investment to secure protocols could be a massive growth lever. For more context, here’s a brief overview of what proof-of-stake is and how it works: What is proof-of-stake? | Redefine Project Proof-of -stake is one way of finding agreement and maintaining an open record book without the need for a traditional middleman. Daniel McGlynn As pointed out in the 21Shares filing, one of the most significant advantages is that the creation of Ethereum staking ETFs makes it possible for all kinds of investors to participate in protocol governance through a “point and click style staking approach.” In other words, staking ETFs makes allocating more capital to staking activities easier. The downstream result should be more staking activities and greater overall network security. The takeaway is that staking ETFs might be an excellent product for people and institutions looking to hold long-term bags. The advancement is that they make participating in the latest forms of digital finance easier. But are staking ETFs Open Money? The introduction of staking ETFs raises interesting questions about where this would fit on the Open Money spectrum. At one end of that spectrum, we have entirely Open Money formats in the form of permissionless money that allows for self-custody and features advantages such as programmability and composability. Holding Bitcoin or Ethereum in a non-custodial wallet is a perfect example of Open Money. At the other end of the spectrum, we have centralized money with caveats or restrictions on access. Money held in a bank account or a brokerage falls into this category. These distinctions were clear for years, mainly because there wasn’t a middle ground. Then came the crypto ETFs. How Does a Bitcoin ETF Work? The Story of Prepackaged BTC This post is the second part of a series and looks at the steps involved when an investor buys exposure to bitcoin through the newly launched exchange traded funds. Daniel McGlynnDaniel McGlynn What is the Ethereum ETF and Why Does it Matter? Ethereum ETF trading went live this week. That matters for reasons of access. Daniel McGlynnDaniel McGlynn On one hand, Bitcoin and Ethereum ETFs allow for exposure to crypto markets in a style and format that wasn’t possible before. The new kind of access opens up new opportunities for people and institutions that might not be able to participate previously. While access is the whole point of the Open Money framework, crypto ETFs fall short of the other criteria. Mainly, what’s missing from the ETFs is the ability to self-custody and the fact that they rely on centralized brokerages and account setups that require permission. The development of staking ETFs is interesting because they make it possible to participate in Open Money activities (staking a decentralized network) without having to hold the naked asset. The issues with custody and centralization still exist, but staking ETFs represent a new hybrid model. While crypto ETFs in their current format are not quite Open Money, but these new products are trending in a new direction. And more options mean more adoption, which is healthy for the entire system. Updates to the Open Money project The project last week mainly focused on the first principles of Open Money. We are covering a bunch of the concepts mentioned above, such as what it means to have money that is interoperable, programmable, composable, etc. This section of the project may feel dry or annoyingly bouncing through jargon. The flip side is that these concepts are essential to building the framework. Without them, some later distinctions in functionality and results won’t make sense. At least, that’s what I think. Let me know what you think (all you have to do is respond to this email). Here are a few recent posts: Open Money is interoperable Interoperability is all about efficiencies that save time and resources Daniel McGlynnDaniel McGlynn Composable money is like financial building blocks Composability is a major value prop for Open Money systems Daniel McGlynnDaniel McGlynn Making money programmable When money can operate like software, new economic activities become possible Daniel McGlynnDaniel McGlynn Open Money is immutable Immutability creates a sense of security for decentralized money systems Daniel McGlynnDaniel McGlynn Section three: The components that make Open Money This section takes a deeper dive into the parts that enable Open Money Daniel McGlynnDaniel McGlynn