Deutsche Digital Assets together with Safello have announced the launch of Staked TAO, an exchange-traded product (ETP) that tracks assets with staking rewards. The product is designed for investors seeking to earn staking income in a regulated manner without the need to manage hardware or wallets themselves, and it will be marketed on conventional stock exchanges.
The ETP will operate like a share that replicates the price of one or more crypto assets, allowing investors to receive part of the rewards that blockchains pay to validators. However, the press release lacks crucial information about where the product will be listed, the fees it will charge, or the tax treatment of the income under local law.
Fundamental details are also not disclosed regarding the custody of private keys, the mechanism to transfer rewards to buyers, or how transactions will be settled. These aspects are critical for the product to trade near the value of its underlying assets and to ensure that buyers can sell quickly if they wish.
Implications and outstanding considerations
The product could offer significant benefits such as facilitating adoption by allowing staking yields to be obtained through ordinary brokers without the need for technical knowledge. It could also improve market liquidity for the underlying tokens, although the difference between the ETP’s price and the real value of its assets will depend on the robustness of custody and settlement systems.
Operational and custody risks are significant, since staking is delegated to external companies whose potential security or governance vulnerabilities would directly affect the end investor. On the other hand, large investors will likely wait for regulatory clarity on the product’s classification, its income, and its tax treatment.
A full evaluation of the product will require waiting for the publication of the prospectus, the name of the stock exchange where it will be listed, the schedule for reward distribution, and the exact custody methods.
