Grayscale has filed an amendment with the U.S. Securities and Exchange Commission proposing an exchange-traded fund built on Zcash, carrying a 2.5% annual fee and, under one dated ownership calculation, a potential 34% stake held by a Digital Currency Group (DCG) affiliate.
The Aug. 21 amendment would rename the existing trust "The Zcash ETF" and list it on NYSE Arca under the ticker ZCSH. The registration remains preliminary: the securities described in the filing cannot yet be sold, and the SEC has neither approved nor disapproved them.
Addressing the price-tracking problem
The ETF structure is designed to fix a long-running issue in which the trust's market price diverges from the underlying value of its holdings. Under the proposed mechanism:
- Large market intermediaries known as authorized participants would create or redeem 10,000-share baskets.
- These creations or redemptions would occur when ZCSH's market price moves away from the net value of the Zcash tokens (ZEC) held by the fund.
- The fund would carry an annual fee of 2.5%.
