Do Hyperliquid ETFs Pass Staking Rewards On to Investors?

[kevin1]

Both BHYP and THYP stake a portion of their HYPE holdings to seek additional returns, but the way those rewards work is important to understand before assuming they function like traditional yield. THYP stakes between 30% and 70% of its holdings through a third-party validator called Figment, while BHYP uses Bitwise's own internal staking infrastructure. In both cases, any staking rewards accrue to the fund itself rather than being distributed directly to shareholders as a guaranteed income stream.

This matters for several reasons. Staking introduces specific risks that plain spot exposure does not carry. Lock-up and unbonding periods can limit the fund's ability to quickly liquidate staked positions. Validator failure is a possibility, and slashing risk means a validator could be penalized for misconduct, which would reduce the total HYPE held by the fund and therefore affect share value. None of the staking rewards are guaranteed, and the rates can vary. Investors drawn to these products partly because of staking upside should read the fund disclosures carefully to understand the conditions under which those rewards are earned and distributed, and the scenarios under which they may not materialize at all.

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Validator gets slashed,

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fund loses HYPE, you lose value