TLDR
- REX Shares files for US ETFs with on-chain staking.
- Proposed ETFs utilize a unique C-corporation structure.
- SEC signals softer stance on staking ETFs regulation.
REX Shares has filed to launch the first US exchange-traded funds (ETFs) with on-chain staking for Ethereum (ETH) and Solana (SOL). This filing could allow US investors to access staking yields within a regulated ETF framework.
The announcement marks a new chapter in crypto investment products, aiming to provide a novel opportunity for US-based investors. These developments have been shared and analyzed by James Seyffart, an ETF analyst at Bloomberg, on his Twitter profile.
Staking Feature in ETFs
The proposed ETFs will be listed on Nasdaq, utilizing a wholly owned Cayman Islands subsidiary for accounting and operations. Each fund employs a C-corporation structure for tax purposes, owning a subsidiary that acquires and stakes ETH or SOL.
Management of the funds will be conducted by REX Advisers, applying a 0.75% management fee. Total first-year expenses are estimated at 1.28%, considering tax accruals. This structure bypasses the traditional SEC 19b-4 process and the Investment Company Act of 1940.
Expert Insights on the Novel Structure
BIG NEWS: @REXShares just filed an effective prospectus for Solana and Ethereum staking ETFs to list here in the US. Don’t know launch date but could be within the next few weeks. These are 40-act funds with a unique structure and do not go through the 19b-4 process.
James Seyffart, ETF Analyst, BloombergThis structure is “very rare in the ETF world,” according to Seyffart. Such innovation might attract institutional investors once trading begins, offering a key piece missing in digital asset allocations to traditional portfolios.
Market Implications for Ethereum and Solana
The filing directly impacts Ethereum (ETH) and Solana (SOL) as they are the underlying assets of these funds. As no ETF trading has commenced yet, on-chain data like TVL changes or liquidity shifts are not visible.
However, a successful launch could lead to increased demand for staked ETH and SOL, potentially boosting staking-related TVL and affecting liquidity on-chain. This effect could extend to other correlated L1 tokens and staking protocols.
Regulatory Context and Industry Reception
The SEC’s implicit approval for the 40-Act structure signals a softer stance on staking ETFs. This can open doors for similar products in the future.
The crypto investment community has reacted positively to this filing, considering it a breakthrough for US-based staking product innovation. It demonstrates REX Shares’ pioneering approach in developing innovative ETF structures.
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