FETH and FSOL staking: Fidelity redemption risks explained

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Fidelity’s FETH and FSOL staking plans give its Ethereum and Solana exchange-traded products authority to stake up to 100% of their crypto under normal conditions, while pairing that ceiling with a layered plan for meeting redemptions when network exits take too long.

The matching framework appears in Aug. 21 prospectuses for the Fidelity Ethereum Fund, or FETH, and Fidelity Solana Fund, or FSOL. Neither fund has a minimum staking requirement, and sponsor FD Funds Management can keep ether or SOL unstaked for foreseeable redemptions, expenses, asset protection and its liquidity program.

The 100% figure is an authority ceiling, not evidence that both funds are fully staked. FSOL reported 1,675,797 SOL staked out of 1,687,589 SOL held at June 30, with a fair value of $126.3 million. Its quarterly report put net assets at $127.079 million and its trailing 30-day staked percentage at 99.64%.

FETH was at a different point. Its June 30 report listed 476,311 ether and $758.609 million in net assets without a staked-ether line. Fidelity amended the trust and custody arrangements in August, and the new prospectus said staking was expected to begin as soon as practicable after Aug. 21. It did not disclose a current staked amount.

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How the redemption ladder works

Reserves are the first buffer. If they are insufficient and unstaking cannot finish within the standard settlement window, the sponsor may extend settlement temporarily. If an exit still is not practicable within a reasonable extended period, it may deliver cash in place of some or all of the crypto owed in an in-kind redemption. The filings describe these as discretionary options, not automatic protections or tools that have already been used.