Fidelity is preparing to add Ethereum staking and quarterly cash distributions to its Fidelity Ethereum Fund (FETH), which currently holds around $898M in net assets.

Under normal conditions, FETH could stake up to 100% of its ETH, while keeping enough assets available for redemptions, expenses and liquidity needs.

Fidelity would retain 85% of gross staking rewards, with the remaining 15% going to the fund sponsor, custodians and node operators. Blockdaemon, Figment and Galaxy are named as FETH's node operators.

Net staking rewards would first cover fund expenses, with the remaining amount distributed to investors at least quarterly. Fidelity may also sell some ETH to fund the payouts.

If approved, Fidelity would join Grayscale and 21Shares in adding staking to existing U.S. Ether products, while BlackRock has opted for a separate staked-ETH ETF.