Mr. Fred Pye of 3iQ reports

3IQ LAUNCHES STAKING IN THE 3IQ ETHER STAKING ETF AND THE ETHER FUND, MARKING NORTH AMERICA'S FIRST STAKING EXCHANGE TRADED PRODUCTS

The Ether Fund and 3iQ Ether ETF will commence staking ether (ETH). Through staking, the funds will earn rewards in the form of ETH, which will be reflected in the net asset value (NAV) of the funds through accretive yield. The ethereum network staking yield sits around 4 per cent. The 3iQ Ether ETF is the world's first ether ETF vehicle to enable staking.

To commemorate this landmark innovative milestone, 3iQ will be waiving the management fee of the 3iQ Ether ETF until March 31, 2024, and, effective Oct. 20, 2023, the fund will commence trading as the 3iQ Ether Staking ETF. The ticker symbol will remain the same.

Building upon its proven record and history of delivering innovative investments of institutional quality, 3iQ achieved another digital asset investment first when it announced last June its plans to commence ETH staking in the funds.

Working in collaboration with industry leaders Coinbase and Tetra Trust, 3iQ is establishing new standards to deliver digital asset investment solutions safely, securely and efficiently within Canada's exchange-traded product (ETP) space. Through its compliant and trusted platform, 3iQ seeks to offer the best of both worlds to its investors, providing additional yield generated by dedicated validators on the ethereum network's proof of stake (PoS) consensus mechanism, while eliminating the complexities of directly handling digital assets.

Fred Pye, chairman and chief executive officer of 3iQ, said: "Our commitment to innovation is unwavering and our history of being at the forefront of digital asset investment solutions speaks for itself. With the launch of ETH staking in The Ether Fund and the 3iQ Ether Staking ETF, we are proud to offer our investors a unique opportunity to fully participate in the upside growth of ethereum."

The funds' digital assets are held in segregated, cold storage custody accounts with Coinbase Custody Trust Company LLC with oversight by Tetra Trust, a qualified custodian backed by WonderFi and other industry giants. 3iQ also exclusively uses Coinbase Custody's institutional staking infrastructure to support ETH staking in these products.

"Collaborating with 3iQ to provide staking services in Canada's ETP space aligns with our strategic mission to deliver safety, security and trust to digital asset investing while maintaining the highest standards of security and compliance across all regulatory regimes," said Brett Tejpaul, head of Coinbase Institutional.

Didier Lavallee, CEO of Tetra, added, "We are excited to contribute our expertise to this partnership and, as Canada's only approved custodian for staking, we are constantly working to ensure safe, secure and successful experiences for 3iQ's investors."

Although there is currently no minimum or maximum amount of the portfolio assets of the funds that may be staked, 3iQ intends to adopt a measured approach to the staking activities, taking into account the liquidity needs of the fund and the novelty of the investment strategy.

3iQ is entitled to receive a portion of the staking rewards generated for the funds by the staking activities (net of the validator fees) such that 75 per cent of the rewards accrue to the funds and 25 per cent of the awards accrue to 3iQ (the staking service fee). The staking service fee shall be calculated and paid monthly, in arrears, plus applicable taxes, and is intended to compensate 3iQ for the additional work required to administer the staking activities for the funds. The staking service fee charged by 3iQ will only be deducted from any rewards generated by the staking activities which will generate income to the funds.

We seek Safe Harbor.