In a landmark move for institutional cryptocurrency adoption, BlackRock has officially disclosed the fee structure for its upcoming iShares Staked Ethereum Trust (ETHB). According to an amended SEC filing submitted late Tuesday, the world's largest asset manager—in partnership with custodian Coinbase—will retain an 18% cut of all staking rewards generated by the fund.
This revelation, surfacing on February 18, 2026, marks a pivotal shift in the crypto exchange-traded fund (ETF) landscape. While previous products like BlackRock's own ETHA offered simple price exposure, the new ETHB staking rewards model introduces a yield-bearing component that directly competes with decentralized staking protocols, albeit with a significant institutional markup.
Inside the 18% Staking Fee Structure
The amended S-1 filing paints a clear picture of how BlackRock intends to monetize Ethereum's consensus layer. Unlike standard management fees which are charged against the total assets under management (AUM), the Coinbase staking fee and BlackRock's cut are taken directly from the gross staking rewards before they reach investors.
Under the proposed model, the trust will keep 82% of the gross rewards for shareholders, while the remaining 18% is split between BlackRock (the sponsor) and Coinbase (the prime execution agent). This fee is separate from the fund's annual sponsor fee of 0.25%, though BlackRock has aggressively positioned the product by offering a temporary fee waiver, reducing the sponsor fee to 0.12% for the first $2.5 billion in assets during the first 12 months.
Financial Impact for Investors
For institutional investors, the trade-off is clear: they sacrifice a portion of the yield for regulatory safety and operational simplicity. With Ethereum yield ETF rates currently hovering around 3% annually, an 18% haircut brings the effective yield down to approximately 2.46% before the sponsor fee is applied. While this is lower than direct on-chain staking, it eliminates the technical complexities of managing validator keys and slashing risks.
ETHB vs. ETHA: The Strategic Pivot
The launch of ETHB represents a significant evolution from the "phase one" approval of spot Ethereum ETFs in 2025. While products like the iShares Ethereum Trust (ETHA) successfully attracted billions in capital by tracking the spot price, they left substantial value on the table by leaving assets unstaked.
BlackRock's new strategy aims to capture that value. The filing indicates that the iShares Staked Ethereum Trust will stake between 70% and 95% of its total Ethereum holdings under normal market conditions. The remaining 5% to 30% will be held in a "liquidity sleeve"—a buffer of unstaked ETH designed to handle daily redemption requests without forcing the fund to unstake assets, which can take days to process on the Ethereum network.
Regulatory Context: The 2026 Landscape
This development follows a thawing of relations between the crypto industry and regulators. After the SEC crypto filing 2026 approvals began to materialize, the agency's guidance in May 2025 clarified that certain institutional staking products would not necessarily be classified as securities violations if structured correctly. This regulatory clarity paved the way for BlackRock to explicitly include institutional staking rewards in its product offering.
However, the move hasn't been without controversy. Just this week, Ethereum co-founder Vitalik Buterin expressed concerns regarding centralization, warning that having massive pools of staked ETH controlled by a handful of U.S. institutions could pose risks to the network's neutrality. With Coinbase acting as the custodian and execution agent for a significant portion of these new ETFs, the concentration of validator power remains a hot topic for industry purists.
A New Era for Institutional Yield
Despite the fees and centralization debates, the market's appetite for a yield-generating institutional product appears robust. Analysts predict that ETHB could quickly rival the asset base of its non-staking predecessor, as institutional allocators naturally gravitate toward "productive" assets that offer returns over mere store-of-value commodities.
As the race for staking dominance heats up, competitors like Grayscale and VanEck are expected to adjust their own fee structures to remain competitive. But for now, BlackRock has set the benchmark: an 18% fee for the convenience of Wall Street-grade Ethereum staking.
