WisdomTree has activated staking in its Ethereum exchange-traded product – WisdomTree Physical Ethereum (ETHW).
Staking involves entrusting Ether – Ethereum’s native cryptocurrency – to a validator node, allowing for the validation of new transaction entries on the blockchain. This process not only secures the network but also enables investors to earn a staking reward, which is distributed by the network for supporting its functionality and validating transactions, said the asset manager.
ETHW – offering a total expense ratio of 0.95% – is listed on the German exchange trading platform Börse Xetra, the Swiss Stock Exchange SIX and Euronext exchanges in Paris and Amsterdam.
Among cryptocurrencies, Ethereum is second only to Bitcoin in market capitalisation, with annual percentage yield varying between 4% and 8%.
ETHW joined WisdomTree Physical Solana as WisdomTree’s second cryptocurrency product lineup to offer a staking reward.
A “major advancement” has been the Shapella upgrade – the recent introduction of a set of rules that allows users to withdraw staked ether and related awards, highlighted Mirva Anttila, director of digital assets research, WisdomTree.
“This completed Ethereum’s full transition to proof-of-stake. Challenges in providing staking rewards to investors have been overcome as we are now able to deliver staking rewards to investors through a risk-managed approach,” added Anttila.
According to the asset manager, ETHW offers investors a way to gain exposure to ether’s price “without the necessity of directly owning the cryptocurrency, managing private access keys, or engaging with the blockchain or digital currency infrastructure in any manner.”
Alexis Marinof, head of Europe, WisdomTree, added: “Staking has the potential to make investing in cryptocurrencies more attractive for investors. However, this should never be at the expense of security or risk management, and this is at the centre of our staking approach.”
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