BlackRock has slashed the staking fee on its Ethereum ETF to remain competitive.
According to Bloomberg ETF analyst James Seyffart, the world’s largest asset manager reduced its staking fee from 18% to 10%, citing an amended filing.
Most U.S Spot ETH ETFs have applied to add a staking feature to their products. So far, some issuers, like Grayscale, have begun distributing rewards to investors.
Is staking demand for ETH at risk?
With surging institutional interest as investors hunt for the 3% staking rewards, overall demand has hit record levels. In fact, the amount of staked ETH hit 37 million ETH for the first time – A 30.6% of the overall circulating ETH supply.
The massive staking demand was further reinstated after the validator entry queue flipped the exit queue in late 2025. At press time, over 3 million ETH were waiting to enter the validator system. This hinted at a strong appetite for staking rewards.
The staking demand could be net positive for ETH’s value.
However, Culper Research believes that recent network upgrades could reverse staking dynamics. According to the trading firm’s warning, Fusaka and other upgrades have lowered validator tips and contracted the overall yield paid to stakers.
The firm claimed,
“Lower yields decrease demand for staking and high-value activity, undermining institutional adoption. The flywheel is now running in reverse.”
Culper Research cited the decline in active validators as a telltale sign of an underlying crisis in the staking segment. It went on to say that this will eventually dent staking demand and overall ETH value, prompting it to go short on ETH.
While plausible, another key data point which could validate Culper Research’s short thesis would be if the validator exit queue surpasses the entry queue.
Even so, Ethereum co-founder Vitalik Buterin views the recent and planned network upgrades as net positive for builders and institutions. In fact, Buterin is positive that upcoming upgrades will reduce the overall cost of running validators, especially solo validators.
It remains to be seen how institutional investors will react to these upgrades in the long run and what impact they may have on ETH demand.
Meanwhile, ETH’s price has been consolidating tightly near $2k, with the Bollinger Bands hinting at a volatile breakout at press time.
Whether it will be a bearish or a bullish breakout will be determined by the broader macro environment and ongoing geopolitical tensions.
Final Summary
- BlackRock slashed the staking fees for its ETH ETF amid surging demand for ETH staking rewards.
- However, Culper Research warned that ETH’s price could drop further due to recent upgrades that have affected validator tips and yields.
