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BlackRock brings Ethereum staking yield to ETFs as Mutuum Finance expands on-chain yield opportunities

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BlackRock brings Ethereum staking yield to ETFs as Mutuum Finance expands on-chain yield opportunities

Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.

BlackRock launches Ethereum ETF with staking rewards as DeFi platforms like Mutuum Finance expand crypto yield opportunities.

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Summary

  • DeFi yield models expand as Mutuum Finance builds Ethereum-based non-custodial lending pools.
  • Mutuum Finance lets users deposit assets for mtTokens, earning yield as borrowers pay interest.
  • MUTM is currently trading at $0.04 with 19k holders, as audits by CertiK and Halborn support its development.

BlackRock has introduced a new Ethereum investment product that combines spot ETH exposure with staking rewards, expanding institutional access to yield-generating crypto strategies. 

The firm’s iShares Staked Ethereum Trust ETF (ETHB) will trade on Nasdaq and aims to distribute staking income to investors while holding Ethereum in custody through Coinbase. As institutional products begin incorporating staking-based returns, yield generation is also expanding across decentralized finance, where platforms such as Mutuum Finance are developing on-chain lending systems designed to provide users with alternative ways to earn yield through crypto assets.

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BlackRock expands Ethereum ETF offering with staking

BlackRock has introduced the iShares Staked Ethereum Trust ETF (ETHB), a Nasdaq-listed product designed to provide investors with spot Ethereum exposure while generating income through staking. The exchange-traded product will allocate a portion of its ETH holdings to staking, allowing investors to participate in Ethereum network rewards without directly managing the staking process.

According to the company’s filing with the U.S. Securities and Exchange Commission, Coinbase will act as custodian and staking provider, while the approved validators currently include Figment, Galaxy Digital, and Attestant. Staking rewards are expected to be distributed monthly, or at least quarterly, to ETF investors. At launch, the ETF carries a 0.25% sponsor fee, which will be temporarily reduced to 0.12% for the first $2.5 billion in assets under management.

The product expands BlackRock’s existing digital asset ETF lineup, which already includes the iShares Bitcoin Trust (IBIT) and iShares Ethereum Trust (ETHA). These products have accumulated more than $55 billion and $6.5 billion in assets, respectively, making them the largest funds in their category.

BlackRock’s move follows similar developments from competitors. Grayscale Investments became the first U.S. issuer to enable staking for Ethereum ETFs in October 2025, while other asset managers such as 21Shares and REX-Osprey have also introduced or planned staking-enabled products.

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DeFi yield opportunities

As institutional products begin incorporating staking-based returns, yield generation is also expanding across decentralized finance platforms. Protocols such as Mutuum Finance are developing on-chain systems where users can earn yield by supplying digital assets to lending pools. Mutuum Finance is an Ethereum-based lending and borrowing protocol designed to provide users with non-custodial access to liquidity while generating returns from lending activity within the platform.

Within the Mutuum Finance model, users deposit assets into liquidity pools and receive mtTokens, which represent their share of the deposited funds and accumulate yield as borrowers pay interest on borrowed assets. These mtTokens can also be staked, allowing users to receive dividends in MUTM tokens, which are the native tokens of the Mutuum Finance ecosystem. The reward distribution works through a mechanism that allocates a portion of protocol-generated fees to purchase MUTM tokens from the market and distribute them to users who stake their mtTokens. This structure links lending activity within the protocol to token-based rewards for participants.

From the token side, MUTM is currently priced at $0.04, with the project reporting more than 19,000 token holders and over $20.8 million raised to date. The MUTM token smart contract has also undergone a security review by CertiK, while the lending and borrowing smart contracts were audited by Halborn prior to the launch of the protocol’s V1 on the Sepolia testnet.

Testing Mutuum Finance’s protocol

The Mutuum Finance V1 protocol is currently running on the Sepolia testnet, where users can explore the main functions of the platform’s lending and borrowing system. Since it operates in a test environment, users interact with Sepolia test tokens instead of real assets, allowing them to try the protocol’s features without using actual funds.

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At present, four crypto assets are available in the test environment: Ethereum (ETH), Chainlink (LINK), Wrapped Bitcoin (WBTC), and Tether (USDT). Users can mint test tokens, supply them to liquidity pools, borrow against collateral, and test staking functionality within the protocol.

Several core components of the system have already been implemented on the testnet, including mtTokens, debt tokens, the Stability Factor risk metric, Safe Mode Borrow Presets, and an automated liquidator bot designed to monitor positions and trigger liquidations when collateral risk exceeds safe thresholds.

A recently introduced feature, Safe Mode Borrow Presets, allows users to select predefined risk levels when opening borrowing positions. The system offers three options: Safe, Balanced, and Aggressive, each corresponding to a different Stability Factor and borrowing limit.

For example, if a user deposits $2,000 worth of ETH as collateral and the protocol allows a maximum loan-to-value (LTV) ratio of 80%, the theoretical borrowing limit would be $1,600. Using the Safe preset, the protocol may restrict borrowing to roughly $900–$1,000, maintaining a larger safety buffer against price volatility. Under the Balanced preset, borrowing could increase to approximately $1,200–$1,300, while the Aggressive preset allows borrowing closer to the upper limit, around $1,500–$1,600, depending on the selected risk parameters.

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The Mutuum Finance team regularly publishes development updates across its official social channels, including X (Twitter), Discord, and Telegram, providing information about new features and protocol improvements.

In its latest development update, the team stated that it has been working on position alert notifications, which will notify users through email, Telegram, or Discord if their Stability Factor changes or falls below a safe level. The team also noted that the next protocol feature has already been completed and is currently undergoing an internal audit, with deployment expected within the coming days.

Overall, the launch of staking-enabled Ethereum ETFs reflects growing demand for yield-generating crypto investment products at the institutional level. At the same time, decentralized platforms such as Mutuum Finance are developing on-chain alternatives that allow users to access lending-based yield and collateralized borrowing directly through smart contracts, highlighting continued expansion across both traditional crypto investment products and DeFi infrastructure.

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Disclosure: This content is provided by a third party. Neither crypto.news nor the author of this article endorses any product mentioned on this page. Users should conduct their own research before taking any action related to the company.

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Crypto World

‘Window Is Narrowing’ To Pass BTC Tax Exemption

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Senate, Bitcoin Regulation, US Government, United States

The Bitcoin Policy Institute (BPI), an industry advocacy group, is eyeing a target window between March and August 2026 to pass a de minimis tax exemption for Bitcoin through Congress, warning that time to pass meaningful legislation is running out.

BPI said it has engaged with 19 Congressional offices in both the House and Senate over the last three months to pitch US lawmakers on a tax exemption for Bitcoin (BTC) transactions below a certain threshold.

Expanding the de minimis tax exemptions beyond dollar-pegged stablecoins has bipartisan support, but the BPI warned that the “window is narrowing” for Bitcoin tax legislation. The BPI said:

“Congress will be increasingly consumed by midterm dynamics as summer approaches, and the bandwidth for complex tax legislation shrinks with every passing week. Senator Lummis, the issue’s most forceful champion, departs the Senate in January 2027.

If a package does not come together in the next few months, the opportunity may not return for years,” the BPI continued. 

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Senate, Bitcoin Regulation, US Government, United States
The timeline and target window for Bitcoin de minimis tax legislation. Source: Bitcoin Policy Institute

Under current US tax rules, using BTC to pay for goods and services triggers a taxable event and tax reporting to the Internal Revenue Service (IRS), preventing the use of Bitcoin as a medium of exchange.

A de minimis exemption would allow small crypto transactions, typically below a set dollar threshold, to be excluded from capital gains reporting, allowing users to spend Bitcoin without calculating gains or losses on minor purchases.

Related: Bitcoin advocate group to fight Basel’s ‘toxic’ treatment of cryptocurrency

Tax policy has kept Bitcoin as an investment and out of commerce

Wyoming Senator Cynthia Lummis introduced a bill in July 2025 proposing a de minimis tax exemption for cryptocurrency transactions of $300 or less, capped at $5,000 annually.

However, the bill failed to gain traction in the Senate, and a competing bill focused entirely on tax exemptions for stablecoins was introduced to the House of Representatives by Congresspersons Max Miller and Steven Horsford in 2025.

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Senate, Bitcoin Regulation, US Government, United States
A comparison of the Lummis standalone crypto tax bill and the stablecoin de minimis tax bill introduced by Congressmen Max Miller and Steven Horsford. Source: Bitcoin Policy Institute

Bitcoin payments are held back by the digital asset’s current treatment under the US tax code, according to Pierre Rochard, a board member for BTC treasury company Strive. 

“The number one impediment to Bitcoin payments adoption is tax policy, not scaling technology,” Rochard said on X.

Magazine: Big questions: Should you sell your Bitcoin for nickels for a 43% profit?