The Canary Staked TRX ETF, the first exchange-traded fund in the United States to combine exposure to TRX with staking of the asset, begins trading this Wednesday (9) on the Cboe BZX under the ticker TRXS.
In addition to tracking the price of TRX, the fund will seek to generate new tokens through staking, a mechanism used to participate in network validation and receive rewards. These gains will be incorporated into net asset value (NAV) of the ETF, rather than being distributed directly to investors.
Under normal conditions, Canary intends to keep at least 90% of the fund's TRX in staking. Fees associated with this operation may consume up to 20% of the rewards, and the prospectus provides that the vehicle retains the remaining 80%. Accumulated rewards will be considered in the daily calculation of NAV.
The TRXS will also charge a annual fee of 1.10% on the fund's assets. As staking results add TRX to reserves while fees and expenses remove assets from the vehicle, the amount of TRX represented by each share may vary over time.
The model brings to an exchange-traded structure a feature that normally requires the investor to hold cryptocurrencies directly and participate in the staking process. Custody of the TRX will be handled by BitGo Bank & Trust, while Canary will be responsible for managing the staking program.
There is also a liquidity component. The process of withdrawing TRX from staking on the Tron network currently includes a period of 14 days until the tokens become available again. Canary says it will manage this risk through a liquidity policy designed to maintain sufficient resources to meet redemptions.
The debut expands the presence of cryptocurrency-linked products in the traditional US financial market. TRX currently has a market value of about US$ 32.1 billion and ranks eighth among the largest cryptocurrencies, according to data cited by The Block.
