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Hashdex plan ties NCIQ crypto ETF staking rewards to fee thresholds
Under the prospective framework, the trust allocates common-share staking income only after an annual net-income threshold, with provider fees handled first and any excess split 40% to Hashdex and 60% to the trust.
Hashdex plans to use staking on some of the crypto held by its Nasdaq CME Crypto Index ETF (NCIQ), with rewards distributed through a threshold-based structure that prioritizes provider economics before allocating income to common shareholders, according to CryptoSlate.
A July 23 Form 8-K named Coinbase Cloud as the initial staking provider, and the filing said staking was expected to begin promptly, subject to operational readiness. Under the July 23 prospectus supplement, the provider first retains its portion of gross rewards, then Hashdex receives all remaining net staking income up to a dollar threshold equal to 0.25% of common-share net asset value through a separate Sponsor Share held exclusively by Hashdex.
After that annual 0.25% NAV threshold is cleared, income above it is split 40% to Hashdex and 60% to the trust for publicly traded NCIQ common shares. If net staking income remains at or below the threshold in a fiscal year, no staking income is allocated to common shareholders, the filing says.
CryptoSlate also noted illustrative math in the prospectus, where if net staking income reached 1% of common-share NAV after provider fees over a full year, the trust would receive 0.45% for common shareholders while Hashdex would collect the remaining 0.55%, including the first 0.25% plus the 40% share of the excess. The ETF lists staking fee details for various networks, and it sets a target staking range of 10% to 20% of total fund NAV, with potential factors like unbonding delays, validator failures, and slashing that can affect realized rewards and tracking versus the underlying index.
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