Canary Capital Group LLC has filed for the new Canary Capital Staking TRX ETF. This new commodity investment trust will enable institutional investors to access staking based returns through TRX. The fund is expected to list on Cboe BZX shortly. The goal of the contract is to track the price of TRX as well as generate yield through staking. Structurally, the ETF functions as a commodity investment trust. As already mentioned, it gets 100% backed by TRX and TRX will be actively participating in staking operations.
This ETF will take staking rewards earned from delegating TRX to network validators and reinvest them. These reinvestments are visible every single day in our daily calculation of Net Asset Value (NAV). This simple mechanism enables the fund to generate optimized returns by compounding staking rewards. The fund will thus need to engage effectively with market makers and Authorized Participants. They will issue and redeem “creation units” of TRX, which represent a set number of ETF shares.
The fund will avoid the use of derivatives and leverage to keep things simple with their investment process. Shareholders will not directly own TRX, but will have an economic interest in it represented by their ownership stake in the trust. Along with the TMC, the fund is sponsored by Canary Capital Group LLC. It is currently waiting for approval from the SEC and is registered as a Delaware Statutory Trust.
The Canary Capital Staking TRX ETF® is designed to directly replicate the performance of TRX. It further increases returns by adding the benefits of staking rewards. This structure provides institutional investors with exposure to the potential benefits of staking rewards, without the need or desire to run their own staking operations. The fund's assets will be actively staked, and the rewards will be reinvested to increase the fund's value.
Share liquidity is provided by Authorized Participants, who create and redeem shares. This procedure additionally helps ensure that the ETF’s market price remains highly correlated with its NAV. This process creates and redeems TRX “creation units” in exchange for ETF shares. It maintains a tight tracking error between the fund’s underlying holdings and its weight in the overall market. The registration of the fund as a Delaware Statutory Trust provides further evidence of its legal structure, though it awaits final regulatory approval.
