How Hashdex Splits Staking Rewards for NCIQ ETF Holders

Hashdex has revealed plans to start staking assets within its Nasdaq CME Crypto Index ETF. The firm will use a specific structure to distribute the earnings generated from these staked coins. Under this model, Coinbase Cloud will serve as the initial staking provider, collecting its own fees before Hashdex takes a share of the remaining income.

The distribution process follows a clear hierarchy. Hashdex claims 100 percent of the net staking rewards until it reaches an annual threshold of 0.25 percent of the fund's common share net asset value. Once that limit is hit, the remaining income is split, with 40 percent going to Hashdex and 60 percent shared among the fund's common shareholders.

This staking model is separate from the fund's standard 0.25 percent annual management fee. Hashdex expects to keep between 10 percent and 20 percent of the total fund assets staked at any given time. The exact amount that flows to investors will depend on network performance, provider commission rates, and the specific assets being staked.

Investors should note that this process carries risks. Staking involves potential complications such as unbonding periods, validator downtime, and slashing events. These factors could cause the ETF price to drift away from the performance of the underlying index, so it remains a metric worth watching for those holding the product.