3iQ Breaks New Ground with Canada’s First Regulated Ethereum Staking Fund
3iQ Digital Asset Management, a leading Canadian digital asset investment fund manager, has announced a groundbreaking development in the world of cryptocurrency investments. The company, known for its innovative approach to digital asset investments, revealed plans to commence staking Ether (ETH) within The Ether Fund and the 3iQ Ether ETF. This marks a significant milestone as it makes 3iQ the first regulated digital asset investment fund manager in Canada to venture into Ethereum staking.
The move comes as a part of 3iQ’s strategy to explore new avenues for investors to maximize returns on their digital assets. Through staking, the Funds will earn rewards in the form of ETH, which will be added to the net asset value (NAV) of the Funds, resulting in accretive yield for investors. Currently, the staking yield on the Ethereum network is approximately 4%. What sets this initiative apart is that the 3iQ Ether ETF is the world’s first Ether ETF vehicle to enable staking, giving Canadian investors a unique opportunity to participate in the growth of Ethereum.
To commemorate this landmark achievement, 3iQ has decided to waive the management fee for the 3iQ Ether ETF until March 31st, 2024. Effective October 20, 2023, the fund will be trading under the name “3iQ Ether Staking ETF,” with the ticker symbol remaining the same.
Fred Pye, Chairman and CEO of 3iQ, expressed his enthusiasm for this innovative development, saying, “Our commitment to innovation is unwavering, and our history of being at the forefront of digital asset investment solutions speaks for itself. With the launch of ETH staking in The Ether Fund and the 3iQ Ether Staking ETF, we are proud to offer our investors a unique opportunity to fully participate in the upside growth of Ethereum.”
The security of the digital assets held by the Funds is a top priority for 3iQ. To ensure this, the assets are stored in segregated, cold storage custody accounts with Coinbase Custody Trust Company, LLC, under the watchful oversight of Tetra Trust, a qualified custodian supported by industry giants. Additionally, 3iQ has chosen to exclusively utilize Coinbase Custody’s institutional staking infrastructure to support ETH staking in these products.
Brett Tejpaul, Head of Coinbase Institutional, commented on the collaboration, stating, “Collaborating with 3iQ to provide staking services in Canada’s ETP space aligns with our strategic mission to deliver safety, security, and trust to digital asset investing while maintaining the highest standards of security and compliance across all regulatory regimes.”
Canada’s only approved custodian for staking, Tetra Trust, is also excited to contribute its expertise to this partnership. Didier Lavallée, CEO of Tetra, assured investors that they are working diligently to ensure a safe, secure, and successful experience for 3iQ’s investors.
3iQ is entitled to receive a portion of the staking rewards generated for the Funds by the Staking Activities (net of the validator fees). Specifically, 75% of the rewards will accrue to the Funds, while the remaining 25% will be allocated to 3iQ as the Staking Service Fee. This fee will be calculated and paid monthly, in arrears, along with applicable taxes, to compensate 3iQ for the additional work required to administer the Staking Activities.
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