Hashdex has introduced a staking mechanism for its Nasdaq CME Crypto Index ETF (NCIQ), enabling the fund to generate returns through staking activities. The structure allows Hashdex to retain a portion of gross staking rewards, while common shareholders receive interim income after a defined annual threshold is met.
As outlined in a July 23 Form 8-K filing, Coinbase Cloud has been selected as the initial staking provider, with operations set to commence immediately upon readiness. The mechanics are detailed in the prospectus supplement submitted July 23.
Under the proposed framework, a designated staking provider initially retains a share of gross rewards. Hashdex then captures all net staking income up to a $0.25% annual threshold relative to common-share net asset value (NAV) via a separate Sponsor Share—a reserved class of unlisted shares exclusively held by Hashdex. Any income exceeding this threshold is divided 40% to Hashdex and 60% to the trust representing NCIQ common shareholders.
For example, if net staking income amounts to 1% of common-share NAV after provider fees over a full year, the trust would allocate 0.45% to common shareholders. Hashdex would capture the remaining 0.55%, comprising the initial 0.25% threshold and 40% of the next 0.75 percentage point. These figures are illustrative and not guaranteed outcomes.
The Sponsor Share return operates independently of NCIQ’s 0.25% management fee and is not offset against it.
