Nasdaq has approved the listing application for Canary Capital's Staked INJ ETF, which would give U.S. brokerage accounts exposure to the Injective token and its staking rewards. The fund cannot sell shares until its separate registration becomes effective, and two layers of fees would reduce what investors keep.
Nasdaq has approved the listing application for Canary Capital's Staked INJ ETF. The fund disclosed the approval in a Form 8-A filed November 3.
The approval covers the listing of the fund's common shares on Nasdaq, not the effectiveness of its separate Securities Act registration. The fund therefore cannot yet sell shares, and its latest S-1 amendment, filed November 2, is a preliminary prospectus that specifies the planned ticker INJC.
How INJC would hold and stake INJ
INJC would hold INJ directly, with BitGo as custodian. Investors would buy and sell shares through their brokers instead of managing the tokens and staking themselves.
Canary expects at least 90% of the fund's INJ to be staked under normal circumstances, while reserving tokens for redemptions, expenses and asset protection. Staking delegates tokens to validators that secure Injective's proof-of-stake network, earning additional INJ.
Two fee layers
The proposed annual sponsor fee is 1.10% of the fund's INJ holdings. Separately, staking fees are expected to take 30% of the INJ rewards generated, leaving 70% for the fund. The staking provider, sponsor and custodian would share those fees.
Rewards would generally be restaked, except for amounts reserved for redemptions, expenses or protecting the fund's assets. Accrued rewards would enter the fund's daily net asset value. However, that does not guarantee growth: the filing says INJ per share will decline if staking rewards are insufficient to cover the sponsor fee and other expenses.
Unbonding period and seed shares
Liquidity also constrains staking. INJ being unstaked enters a 21-day unbonding period, during which it cannot be transferred and earns no rewards. Investors trading fund shares could also pay a premium or receive a discount to their underlying net asset value.
The November 2 filing says the Injective Foundation has indicated its intent to purchase up to $15 million of seed shares. The fund expects to receive that purchase in INJ rather than cash.
Source: The Defiant
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