Coinbase Cloud and Coinbase Prime power 3iQ ETH Staking ETF
November 7, 2023
By Lewis Han, Senior Manager, Cloud Sales
TLDR: 3iQ Corp launched the first Ethereum staking ETF powered by Coinbase Prime and Coinbase Cloud. The 3iQ Ether Staking ETF (TSX: ETHQ, ETHQ.U) enables investors to not only have ETH exposure, but to also receive staking rewards from participating in Ethereum’s consensus. Furthermore, the ETF provides coverage for the most common instances of slashing and leverages dedicated validators to provide institutions with easy access to staking without any of the complexities of required minimums, diligence on custodians or validators, or entry and exit queues associated with ETH staking.
Why this is important
ETFs are incredibly important in an investor's toolkit as they enable broad exposure to asset classes such as the S&P 500, gold, real estate, and crypto through a regulated securities offering. An ETF enables investors to obtain exposure to the underlying asset from the comfort of their existing financial accounts, including tax-advantaged investment vehicles (e.g., IRAs), without the need to learn how to safely purchase, custody, and stake crypto assets natively.
Although the industry is still waiting for spot crypto ETFs (such as a spot BTC ETF) to be approved in the United States, other countries such as Canada have had such products for years. Spot ETFs can reduce tracking error risk and also enable lower fees compared to futures ETFs. Spot ETFs also enable the ability to stake underlying assets to generate additional rewards which may be in excess of fees, which is highly beneficial for investors.
Why 3iQ chose Coinbase Prime and Coinbase Cloud
3iQ prioritizes security and compliance within their products in order to protect underlying assets and ensure peace of mind for their clients. 3iQ is a pioneer in the digital asset landscape, launching the first regulated ETP in North America in 2020 and piloting the custody infrastructure used by the rest of the Canadian ETP industry today. Through a rigorous due diligence process, 3iQ has chosen to trust Coinbase Prime and Coinbase Cloud with custody of the underlying assets and staking infrastructure, respectively. 3iQ joins a distinguished list of leading firms that rely on Coinbase for critical elements of their crypto products and overall strategy.
With over $100B in AUC and support for hundreds of assets, Coinbase Prime is a full-service prime brokerage platform that provides Qualified Custody, advanced trading, financing, staking, governance, and prime services for institutional investors. Coinbase Prime focuses on providing a highly secure and sophisticated storage solution for institutions and individuals that hold large crypto holdings.
Coinbase Cloud provides multi-cloud, multi-region, and multi-client infrastructure to ensure reliability and enterprise-grade performance that meets the needs of the most demanding institutional customers. Coinbase Cloud has maintained a world-class record when it comes to slashing thanks to best-in-class infrastructure and technology designed to minimize risk of double signing. Coinbase Cloud’s ETH staking product enables custodial staking via Coinbase Prime (as used by the 3iQ Ether Staking ETF), non-custodial staking via API, and partial ETH staking.