Canary Capital Proposes Staked INJ ETF for Nasdaq to Offer Regulated Access to Injective Staking

Canary Capital is seeking approval from the Securities and Exchange Commission (SEC) to launch the Canary Staked INJ ETF, which would trade on Nasdaq under the ticker INJC. This ETF aims to allow U.S. investors to own the INJ token from the Injective network while collecting staking rewards without the need for a crypto wallet.

The fund plans to hold INJ and stake at least 90% of its assets through third-party providers. Staking is essential for proof-of-stake networks like Injective, as it helps validate transactions and rewards token holders. Instead of distributing staking rewards as cash, the fund intends to reinvest net rewards back into the fund, allowing the share price to reflect both the price of INJ and accumulated rewards.

The proposed ETF would charge an annual management fee of 1.10%, with 30% of staking rewards allocated to fees. To address the 21-day unbonding period imposed by Injective, the fund will maintain sufficient liquidity for redemptions, which is why it targets a 90% staking rate rather than 100%.

The Injective Foundation has committed to an initial seed purchase of up to $15 million in ETF shares, paid in INJ. While regulated INJ exposure is not new in Europe, with 21Shares launching its AINJ product in 2024, this would mark a significant development for U.S. investors.

Investors should be aware of the risks involved, including the potential for sharp price swings in INJ and the operational risks associated with third-party staking providers. The SEC's approval remains a crucial factor, as the filing is currently a proposal awaiting regulatory sign-off.