<SEC-DOCUMENT>0001213900-25-097486.txt : 20251008
<SEC-HEADER>0001213900-25-097486.hdr.sgml : 20251008
<ACCEPTANCE-DATETIME>20251008171703
ACCESSION NUMBER:		0001213900-25-097486
CONFORMED SUBMISSION TYPE:	424B3
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20251008
DATE AS OF CHANGE:		20251008

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			21Shares Ethereum ETF
		CENTRAL INDEX KEY:			0001992508
		STANDARD INDUSTRIAL CLASSIFICATION:	 [6221]
		ORGANIZATION NAME:           	09 Crypto Assets
		EIN:				000000000
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		424B3
		SEC ACT:		1933 Act
		SEC FILE NUMBER:	333-274364
		FILM NUMBER:		251383125

	BUSINESS ADDRESS:	
		STREET 1:		477 MADISON AVENUE
		CITY:			NEW YORK
		STATE:			NY
		ZIP:			10022
		BUSINESS PHONE:		(646) 370-6016

	MAIL ADDRESS:	
		STREET 1:		477 MADISON AVENUE
		CITY:			NEW YORK
		STATE:			NY
		ZIP:			10022

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	21Shares Core Ethereum ETF
		DATE OF NAME CHANGE:	20240531

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	Ark 21Shares Ethereum ETF
		DATE OF NAME CHANGE:	20230906
</SEC-HEADER>
<DOCUMENT>
<TYPE>424B3
<SEQUENCE>1
<FILENAME>ea0260524-424b3_21shares.htm
<DESCRIPTION>PROSPECTUS SUPPLEMENT
<TEXT>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><B>Filed pursuant to Rule 424(b)(3)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><B>Registration No. 333-274364</B></P>

<P STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>21SHARES ETHEREUM ETF</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SUPPLEMENT NO. 8 DATED OCTOBER 8, 2025</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>TO THE PROSPECTUS DATED JULY 22, 2024</B></P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">This prospectus supplement
No. 8 (this &ldquo;Supplement&rdquo;) is being filed to update and supplement the information contained in the prospectus of 21Shares
Ethereum ETF (the &ldquo;Trust&rdquo;) dated July 22, 2024 (as supplemented or amended from time to time, the &ldquo;Prospectus&rdquo;).
Each of the Prospectus and this Supplement form a part of our Registration Statement on Form S-1 (Registration No. 333-274364) declared
effective by the Securities and Exchange Commission (the &ldquo;SEC&rdquo;) on July 22, 2024 (as amended by the Post-Effective Amendment
No. 1, declared effective September 19, 2025, and as further amended,&nbsp;the &ldquo;Registration Statement&rdquo;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">The purpose of this Supplement
is to update and supplement certain information contained in the Registration Statement and Prospectus to disclose that the Trust will
allow for staking. Except as otherwise set forth below, the information set forth in the Registration Statement and Prospectus remains
unchanged. For clarity, additions to existing disclosure from the Registration Statement and Prospectus are indicated with bold, underlined
text and deletions are indicated with strikethrough. All page, paragraph and section references used herein refer to the Registration
Statement and Prospectus before any additions or deletions resulting from the revised disclosures, and capitalized terms used but not
otherwise defined herein have the meanings ascribed to them in the Registration Statement and Prospectus.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">The information set forth
below serves as a supplement to the Registration Statement and Prospectus. Except as described herein, the information provided in the
Registration Statement and Prospectus continues to apply. To the extent this Supplement differs from or updates information in the Registration
Statement or Prospectus, you should rely on the information contained in this Supplement. The Registration Statement and Prospectus contain
important additional information. This Supplement should be read in conjunction with the Registration Statement and Prospectus.</P>




<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><B>Filed Pursuant to Rule 424(b)(3)<BR>
Registration No. 333-274364</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>Shares</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>21Shares Ethereum ETF</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">The 21Shares Ethereum ETF (the
&ldquo;Trust&rdquo;) is an exchange-traded fund that issues common shares of beneficial interest (the &ldquo;Shares&rdquo;) that trade
on the Cboe BZX Exchange, Inc. (the &ldquo;Exchange&rdquo;). The Trust is a passive investment vehicle that does not seek to generate
returns beyond tracking the price of ether. This means the Sponsor does not speculatively sell ether at times when its price is high or
speculatively acquire ether at low prices in the expectation of future price increases. It also means the Trust will not utilize leverage,
derivatives or any similar arrangements in seeking to meet its investment objective. The Trust&rsquo;s investment objective is to seek
to track the performance of ether, as measured by the performance of the CME CF Ether-Dollar Reference Rate&nbsp;&mdash;&nbsp;New&nbsp;York
Variant (the &ldquo;Index&rdquo;), adjusted for the Trust&rsquo;s expenses and other liabilities<STRIKE>.</STRIKE><B><U>, and to reflect
rewards from staking a portion of the Trust&rsquo;s ether, to the extent the Sponsor in its sole discretion determines that the Trust
may do so without undue legal or regulatory risk, such as, without limitation, the risk of jeopardizing the Trust&rsquo;s ability to qualify
as a grantor trust for U.S. Federal income tax purposes.</U></B> CF Benchmarks Ltd. is the administrator for the Index (the &ldquo;Index
Provider&rdquo;). The Index is designed to reflect the performance of ether in U.S.&nbsp;dollars. In seeking to achieve its investment
objective, the Trust holds ether and values its Shares daily based on the Index. 21Shares US LLC (the&nbsp;&ldquo;Sponsor&rdquo;) is the
sponsor of the Trust, CSC Delaware Trust Company (the &ldquo;Trustee&rdquo;) is the trustee of the Trust, and Coinbase Custody Trust Company,
LLC (&ldquo;Coinbase&rdquo;, BitGo New York Trust Company, LLC (&ldquo;BitGo&rdquo;), and Anchorage Digital Bank, N.A. (&ldquo;Anchorage&rdquo;,
and together with Coinbase and BitGo, as the context may require, the &ldquo;Ether Custodian&rdquo;, the &ldquo;Ether Custodians&rdquo;
and each an &ldquo;Ether Custodian&rdquo;) are the ether custodians for the Trust and hold all of the Trust&rsquo;s ether on the Trust&rsquo;s
behalf.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B><U>To the extent the Sponsor
determines to stake a portion of the Trust&rsquo;s ether, the Sponsor plans to engage one or more third party staking services providers
(each a &ldquo;Staking Services Provider&rdquo;) to conduct such staking activities (&ldquo;Staking Activities&rdquo;). The Sponsor&rsquo;s
choice of third party Staking Services Providers, and its decision to allocate ether amongst chosen Staking Services Providers, will be
based on a range of factors, including but not limited to the performance, reliability, and reputation of the Staking Services Provider,
including monitoring their uptime and slashing history.</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B><U>The Sponsor may also
seek to utilize alternative means to engage in Staking Activities, subject to its determination that the Trust may do so without undue
legal, regulatory or tax risk, including the use or holding of Liquid Staking Tokens (as defined below), though no such determination
has been made as of the date of this Prospectus. More specifically, the Trust may earn staking rewards by investing in liquid staking
protocols, which are staking protocols that provide a freely-tradeable digital token called a &ldquo;Liquid Staking Token&rdquo; that
represents the ether staked with the staking protocol. Liquid Staking Tokens permit the holder to receive the benefits of staking without
the illiquidity of a locked-up ether. Liquid Staking Tokens may only be acquired by the Trust if the Sponsor were to make a determination
that the Liquid Staking Token represents beneficial ownership of the underlying ether for U.S. federal income tax purposes and that acquisition
of the Liquid Staking Token did not vary the investments of the Trust. No definitive determination has been made as of the date of this
Prospectus as to which, if any, of these alternative means the Trust may adopt. Should such a change take place, if any, the Trust will
notify the owners of the beneficial interests of Shares in a prospectus supplement or in its periodic reports filed pursuant to the Securities
Exchange Act of 1934, as amended (the &ldquo;Exchange Act&rdquo;), as applicable, and on the Sponsor&rsquo;s website.</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><STRIKE>Neither the Trust,
nor the Sponsor, nor the Ether Custodians, nor any other person associated with the Trust will, directly or indirectly, employ any portion
of the Trust&rsquo;s assets in actions where any portion of the Trust&rsquo;s ether becomes subject to the Ethereum proof-of-stake validation
or is used to earn additional ether or generate income or other earnings (collectively, &ldquo;Staking Activities&rdquo;). Accordingly,
the Trust will not derive any income from, or receive any form of staking rewards of any kind in connection with, or otherwise recognize
any economic benefit from, any Staking Activity.</STRIKE></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-variant: small-caps">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-variant: small-caps"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-variant: small-caps"><B>PROSPECTUS
SUMMARY</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Overview of the Trust</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">The 21Shares Ethereum ETF (the
&ldquo;Trust&rdquo;) is an exchange-traded fund that issues common shares of beneficial interest (the &ldquo;Shares&rdquo;) that trade
on the Cboe BZX Exchange, Inc. (the &ldquo;Exchange&rdquo;). The Trust&rsquo;s investment objective is to seek to track the performance
of ether, as measured by the performance of the CME CF Ether-Dollar Reference Rate&nbsp;&mdash;&nbsp;New&nbsp;York Variant (the &ldquo;Index&rdquo;),
adjusted for the Trust&rsquo;s expenses and other liabilities<STRIKE>.</STRIKE><B><U>, and to reflect rewards from staking a portion of
the Trust&rsquo;s ether, to the extent the Sponsor in its sole discretion determines that the Trust may do so without undue legal or regulatory
risk, such as, without limitation, the risk of jeopardizing the Trust&rsquo;s ability to qualify as a grantor trust for tax purposes.</U></B>
The Index is calculated by CF Benchmarks Ltd. (the &ldquo;Index Provider&rdquo;) based on an aggregation of executed trade flow of major
ether spot exchanges. The Index is designed to reflect the performance of ether in U.S.&nbsp;dollars. The Index currently uses substantially
the same methodology as the CME CF Ether Dollar Reference Rate (&ldquo;ETHUSD_RR&rdquo;), including utilizing the same six ether exchanges,
which is the underlying rate to determine settlement of CME ether futures contracts, except that the Index is calculated as of 4:00&nbsp;p.m.
Eastern time (&ldquo;ET&rdquo;), whereas the ETHUSD_RR is calculated as of 4:00&nbsp;p.m. London time. The Shares of the Trust are valued
daily based on the Index.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">In seeking to achieve its investment
objective, the Trust holds ether. The Trust is sponsored by 21Shares US&nbsp;LLC (the &ldquo;Sponsor&rdquo;), a wholly-owned subsidiary
of Amun Holdings Ltd.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">The Trust does not provide
investors with direct exposure to ether, and an investment in the Trust is not a direct investment in ether. Rather, the Trust provides
investors with the opportunity to indirectly access the market for ether through a traditional brokerage account without the potential
barriers to entry or risks involved with holding or transferring ether directly or acquiring it from an ether spot market.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B><U>To the extent the Sponsor
determines to stake a portion of the Trust&rsquo;s ether, the Sponsor plans to engage one or more third party staking services providers
(each a &ldquo;Staking Services Provider&rdquo;) to conduct such staking activities (&ldquo;Staking Activities&rdquo;). The Sponsor&rsquo;s
choice of third party Staking Services Providers, and its decision to allocate ether amongst chosen Staking Services Providers, will be
based on a range of factors, including but not limited to the performance, reliability, and reputation of the staking provider, including
monitoring their uptime and slashing history.</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B><U>The Sponsor may instead
seek to utilize alternative means to engage in Staking Activities, subject to its determination that the Trust may do so without undue
legal, regulatory or tax risk, including the use or holding of Liquid Staking Tokens (as defined below), though no such determination
has been made as of the date of this Prospectus. More specifically, the Trust may earn staking rewards by investing in liquid staking
protocols, which are staking protocols that provide a freely-tradeable digital token called a &ldquo;Liquid Staking Token&rdquo; that
represents the ether staked with the staking protocol. Liquid Staking Tokens permit the holder to receive the benefits of staking without
the illiquidity of a locked-up ether. Liquid Staking Tokens may only be acquired by the Trust if the Sponsor were to make a determination
that the Liquid Staking Token represents beneficial ownership of the underlying ether for U.S. federal income tax purposes and that acquisition
of the Liquid Staking Token did not vary the investments of the Trust. No definitive determination has been made as of the date of this
Prospectus as to which, if any, of these alternative means the Trust may adopt. Should such a change take place, if any, the Trust will
notify the owners of the beneficial interests of Shares in a prospectus supplement or in its periodic Exchange Act reports, as applicable,
and on the Sponsor&rsquo;s website.</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">The Trust custodies its
ether at regulated third-party custodians, Coinbase Custody Trust Company, LLC (&ldquo;Coinbase Custodian&rdquo;), BitGo New York Trust
Company, LLC (&ldquo;BitGo&rdquo;), and Anchorage Digital Bank N.A (&ldquo;Anchorage&rdquo;, and, together with Coinbase Custodian and
BitGo, as the context may require, the &ldquo;Ether Custodians&rdquo; and each an &ldquo;Ether Custodian&rdquo;). The Coinbase Custodian
is chartered as a New&nbsp;York state limited liability trust company that provides custody and trade execution services for digital
assets. BitGo is a New York Trust Company that provides custody and trade execution services for digital assets. Anchorage is a South
Dakota chartered Trust Company and a federally chartered crypto bank that provides custody and trade execution for digital assets. The
Ether Custodians are not Federal Deposit Insurance Corporation (&ldquo;FDIC&rdquo;)-insured but carries insurance provided by private
insurance carriers. The Trust, the Sponsor and the service providers do not loan or pledge the Trust&rsquo;s assets, <B><U>including
staked assets,</U></B> nor do the Trust&rsquo;s assets<B><U>, including staked assets,</U></B> serve as collateral for any loan or similar
arrangement, other than in connection with the Post-Trade Financing Agreement. The Trust does not invest in derivatives. The Sponsor
believes that the Shares are designed to provide investors with a cost-effective and convenient way to invest in ether without purchasing,
holding and trading ether directly.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

</DIV>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B><U>The amount of ether represented
by the Shares is expected to decline over time because of the transfer of the Trust&rsquo;s ether to pay the Sponsor Fee and other liabilities,
regardless of whether the trading price of the Shares rise or fall. The decrease in the amount of ether represented by the Shares due
to paying the Sponsor Fee and other liabilities may be offset by net staking rewards, if any.</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B><U>Should the Trust seek
to engage in Staking Activities, the Trust may stake a portion of the Trust&rsquo;s assets through one or more Staking Services Providers.
As a result of any staking activity in which the Trust may engage, the Trust expects to receive certain staking rewards of ether, which
is expected to be treated for federal income tax purposes as income to the Trust. See &ldquo;United States Federal Income Tax Consequences&rdquo;
for further description of the tax implications of the activities of the Trust to an investor. The Staking Services Provider shall exercise
no discretion as to the amount of the Trust&rsquo;s ether to be staked or the timing of the Staking Activities. The Ether Custodians will
maintain exclusive possession and control of the private keys associated with any staked ether at all times. Staking activity on the Ethereum
network involves the delegation of ether to validators and carries certain risks. Misbehavior or poor performance by validators may result
in such validators receiving reduced staking rewards for an epoch during which they misbehaved or performed poorly. Such validators may
also become &ldquo;blacklisted&rdquo; by ether tokenholders, meaning that ether tokenholders may decide not to delegate stake to such
validators in the future which could preclude such validators from being selected to validate. Should any of the Trust&rsquo;s Staking
Services Providers engage in malicious activity or perform poorly, then such Staking Services Provider may be blacklisted which could
negatively impact the Trust&rsquo;s abilities to engage in Staking Activities and/or otherwise result in the Trust earning reduced staking
rewards. Additionally, the staking process includes protocol-defined warm-up, activation and withdrawal periods, during which staked ether
is temporarily locked and inaccessible. These phases affect when ether begins earning rewards, participates in consensus and becomes available
for transfer or redelegation. Block rewards and transaction fees are not considered staking rewards and will not accrete to the Trust.
The description and considerations related to staking are discussed more fully below in &ldquo;Principal Investment Risks &ndash; Risks
Associated with Ether and Ethereum Network.&rdquo;</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Ether and the Ethereum Network</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">Ether is a digital asset, also
referred to as a digital currency or cryptocurrency, which serves as the unit of account on the open-source, decentralized, peer-to-peer
Ethereum network (&ldquo;Ethereum&rdquo; or &ldquo;Ethereum network&rdquo;). Ether may be used to pay for goods and services, stored for
future use, or converted to a fiat currency. The value of ether is not backed by any government, corporation, or other identified body.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">The value of ether is determined
in part by the supply of and demand for, ether in the markets for exchange that have been organized to facilitate the trading of ether.
Ether is the second largest cryptocurrency by market capitalization behind bitcoin. As of July 15, 2025, ether had a total market capitalization
of approximately $364.6 billion and represented approximately 9.8% of the entire digital asset market. Ether is maintained on the Ethereum
network. No single entity owns or operates the Ethereum network. The Ethereum network is accessed through software and governs ether&rsquo;s
creation and movement. The source code for the Ethereum network is open-source, and anyone can contribute to its development.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

</DIV>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">The Ethereum software source
code allows for the creation of decentralized applications (&ldquo;DApps&rdquo;) that are supported by a transaction protocol referred
to as &ldquo;smart contracts,&rdquo; which includes the cryptographic operations that verify and secure ether transactions. A smart contract
operates by a&nbsp;predefined&nbsp;set of rules (i.e., &ldquo;if/then statements&rdquo;) that allows it to automatically execute code
the same way on any Ethereum node on the network. Such actions taken by the&nbsp;predefined&nbsp;set of rules are not necessarily contractual
in nature but are intended to eliminate the arbitration of a third party for carrying out code execution on behalf of users, making the
system decentralized, while empowering developers to create a wide range of applications layering together different smart contracts.
Although there are many alternatives, the Ethereum network is the oldest and largest smart contract platform in terms of market cap, availability
of decentralized applications, and development activity. Smart contracts can be utilized across several different applications ranging
from art to finance. Currently, one of the most popular applications is the use of smart contracts for underpinning the operability of
decentralized financial services (&ldquo;DeFi&rdquo;), which consist of numerous highly interoperable protocols and applications. DeFi
offers many opportunities for innovation and has the potential to create an open, transparent, and immutable financial infrastructure,
with democratized access.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">Because the Ethereum network
has no central authority, the release of updates to the network&rsquo;s source code by developers does not guarantee that the updates
will be automatically adopted by the other participants. Users and validators must accept any changes made to the source code by downloading
the proposed modification and that modification is effective only with respect to those users and validators who choose to download it.
As a practical matter, a modification to the source code becomes part of the Ethereum network only if it is accepted by participants that
collectively have a majority of the processing power on the Ethereum network.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">If a modification is accepted
by only a percentage of users and validators, a division will occur such that one network will run the pre-modification source code and
the other network will run the modified source code. Such a division is known as a &ldquo;fork.&rdquo; A fork may be intentional such
as the Ethereum &ldquo;Merge.&rdquo; The Merge represents the Ethereum Network&rsquo;s shift from proof-of-work to proof-of-stake. This
means that instead of being required to solve complex mathematical problems validators are required to stake ether. With respect to any
fork, airdrop or similar event, the Sponsor will cause the Trust to irrevocably abandon the Incidental Rights (as defined below) or IR
Virtual Currency (as defined below). In the event the Trust seeks to change this position, an application would need to be filed with
the SEC by the Exchange seeking approval to amend its listing rules.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">New ether is created as a result
of &ldquo;staking&rdquo; of ether by validators. Validators are required to stake ether in order to be selected to perform validation
activities and then once selected, as a reward, they earn newly created ether. Validation activities include verifying transactions, storing
data, and adding to the Ethereum blockchain. Holders of ether must stake at least 32 ether to become an Ethereum validator. The Ethereum
network provides the ability to execute peer-to-peer transactions to realize, via smart contracts, automatic, conditional transfer of
value and information, including money, voting rights, and property.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><STRIKE>Neither the Trust,
nor the Sponsor, nor the Ether Custodians, nor any other person associated with the Trust will, directly or indirectly, employ any portion
of the Trust&rsquo;s assets in actions where any portion of the Trust&rsquo;s ether becomes subject to the Ethereum proof-of-stake validation
or is used to earn additional ether or generate income or other earnings (collectively, &ldquo;Staking Activities&rdquo;). Accordingly,
the Trust will not derive any income from, or receive any form of staking rewards of any kind in connection with, or otherwise recognize
any economic benefit from, any Staking Activity. Foregoing potential returns from Staking Activities could cause an investment in the
Shares to deviate from that which would have been obtained by purchasing and holding ether directly by virtue of giving up staking as
a source of return when an investor holds the Shares.</STRIKE></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B><U>More specifically, staking
on the Ethereum network refers to using ether, or permitting ether to be used, directly or indirectly, through an agent or otherwise,
in the Ethereum network&rsquo;s proof-of-stake validation protocol, in exchange for the receipt of consideration, including, but not limited
to, staking rewards paid in kind.</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

</DIV>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>The Trust&rsquo;s Investment Objective</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">The Trust&rsquo;s investment
objective is to seek to track the performance of ether, as measured by the Index, adjusted for the Trust&rsquo;s expenses and other liabilities<B><U>,
and to reflect rewards from staking a portion of the Trust&rsquo;s ether, to the extent the Sponsor in its sole discretion determines
that the Trust may do so without undue legal or regulatory risk, such as, without limitation, the risk of jeopardizing the Trust&rsquo;s
ability to qualify as a grantor trust for tax purposes</U></B>. In seeking to achieve its investment objective, the Trust holds ether
and values its Shares daily as of 4:00&nbsp;p.m. ET based on the Index.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">Barring the liquidation of
the Trust or extraordinary circumstances (including but not limited to, non-recurring expenses and costs of services performed by the
Sponsor or a service provider on behalf of the Trust to protect the Trust or the interests of Shareholders, such as in connection with
any fork of the Ethereum blockchain, any indemnification of agents, service providers or counterparties of the Trust and extraordinary
legal fees and expenses, including any legal fees and expenses incurred in connection with litigation, regulatory enforcement or investigation
matters), the Trust generally will not purchase or sell ether, other than in connection with the creation or redemption of Shares. The
Sponsor may also sell ether to pay certain expenses, which may be facilitated by the Prime Broker (as defined below) or any other prime
brokers with whom the Trust contracts.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><U>Staking</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B><U>To the extent the Sponsor
determines to stake a portion of the Trust&rsquo;s ether, the Sponsor plans to engage one or more Staking Services Providers to conduct
such Staking Activities. The Sponsor&rsquo;s choice of third party Staking Services Providers, and its decision to allocate ether amongst
chosen Staking Services Providers, will be based on a range of factors, including but not limited to the performance, reliability, and
reputation of the staking provider, including monitoring their uptime and slashing history.&nbsp;</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B><U>The Sponsor may also
seek to utilize alternative means to engage in Staking Activities, subject to its determination that the Trust may do so without undue
legal, regulatory or tax risk, including the use or holding of Liquid Staking Tokens, though no such determination has been made as of
the date of this Prospectus. These alternative means to engage in Staking Activities are subject to the Sponsor&rsquo;s determination
that the Trust may do so without undue legal, regulatory or tax risk. More specifically, the Trust may earn staking rewards by investing
in liquid staking protocols, which are staking protocols that provide a freely-tradeable digital token called a &ldquo;Liquid Staking
Token&rdquo; that represents the ether staked with the staking protocol. Liquid Staking Tokens permit the holder to receive the benefits
of staking without the illiquidity of a locked-up ether. Liquid Staking Tokens may only be acquired by the Trust if the Sponsor were to
make a determination that the Liquid Staking Token represents beneficial ownership of the underlying ether for U.S. federal income tax
purposes and that acquisition of the Liquid Staking Token did not vary the investments of the Trust. No definitive determination has been
made as of the date of this Prospectus as to which, if any, of these alternative means the Trust may adopt. Should such a change take
place, if any, the Trust will notify the owners of the beneficial interests of Shares in a prospectus supplement or in its periodic Exchange
Act reports, as applicable, and on the Sponsor&rsquo;s website.</U></B></P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B><U>The Trust&rsquo;s staking
model aims to maximize the portion of the Trust&rsquo;s ether available for staking while controlling for liquidity and redemption risks.
The model determines an optimal target range for the portion of assets staked, which is set by the Sponsor and which is based on factors
including lock-up periods, historical and stressed redemption activity, Trust size, projected staking yields, staking provider reliability,
secondary market liquidity, and broader market conditions (the &ldquo;Utilization Rate&rdquo;) by balancing expected yield against potential
costs.</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

</DIV>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B></B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B><U>The Staking Services
Provider will exercise no discretion as to the amount of the Trust&rsquo;s ether to be staked or the timing of the Staking Activities.&nbsp;While
the Trust may stake a maximum of 100% of its ether holdings, the amount of ether that remains unstaked is determined based on the Trust&rsquo;s
Utilization Rate analysis, and accordingly may vary from time to time. Based on Utilization Rate analysis applied to historical data,
the Trust generally intends to stake between 40% and 70% of the ether it holds, although the amount of ether that is staked may be lesser
or greater from time to time. The precise percentage to be staked will be based on the estimated liquidity needs of the Trust, as determined
by the Sponsor. In determining how to stake the ether held by the Trust, and how much ether to stake, the Trust&rsquo;s model operates
on the following key parameters:</U></B></P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.25in">&nbsp;</TD>
    <TD STYLE="width: 0.25in; font-size: 10pt"><FONT STYLE="font-size: 10pt"><B><U>&#9679;</U></B></FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: justify"><FONT STYLE="font-size: 10pt"><B><U>Unbonding period: The number of days required for unbonding staked assets as dictated by the Ethereum protocol;</U></B></FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.25in">&nbsp;</TD>
    <TD STYLE="width: 0.25in; font-size: 10pt"><FONT STYLE="font-size: 10pt"><B><U>&#9679;</U></B></FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: justify"><FONT STYLE="font-size: 10pt"><B><U>ETF Historical redemption patterns: The historical percentages of cumulative drawdowns in redemptions during the bonding period for US listed ETFs and other similar instruments listed abroad;</U></B></FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.25in">&nbsp;</TD>
    <TD STYLE="width: 0.25in; font-size: 10pt"><FONT STYLE="font-size: 10pt"><B><U>&#9679;</U></B></FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: justify"><FONT STYLE="font-size: 10pt"><B><U>Size of the Trust &amp; Concentration: A trust with a high concentration of shareholders may have a higher percentage risk of redemption compared to a trust has a diversified shareholder base and a large number of assets under management;</U></B></FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.25in">&nbsp;</TD>
    <TD STYLE="width: 0.25in; font-size: 10pt"><FONT STYLE="font-size: 10pt"><B><U>&#9679;</U></B></FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: justify"><FONT STYLE="font-size: 10pt"><B><U>Staking Services Provider performance: The model takes into account the performance, reliability, and reputation of staking services providers. This includes adherence to certain minimum operating standards, including monitoring their uptime, and slashing history; and</U></B></FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.25in">&nbsp;</TD>
    <TD STYLE="width: 0.25in; font-size: 10pt"><FONT STYLE="font-size: 10pt"><B><U>&#9679;</U></B></FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: justify"><FONT STYLE="font-size: 10pt"><B><U>Market conditions monitoring: The model tracks market conditions, like regime shifts in momentum/liquidity, conditions of heightened demand or supply, network events and protocol changes, staking services provider risks.</U></B></FONT></TD></TR>
  </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B><U>The Trust intends to
make available on its website the current percentage of the Trust&rsquo;s ether being staked on a daily basis.</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B><U>The rewards owed or paid to the Ether Custodians as compensation for
the Staking Services Providers reduce the amount of ether rewards that are generated from the Trust&rsquo;s Staking Program that are available
in the assets of the Trust. Each Staking Services Provider that generates staking rewards will be entitled to compensation determined
as a portion of the staking rewards, which is generally expected to be determined by a fixed percentage of the overall rewards amount
(the &ldquo;Staking Provider Consideration&rdquo;). The portion of the consideration paid to the Sponsor for arranging for the staking
of the Trust&rsquo;s ether (the &ldquo;Sponsor&rsquo;s Staking Portion&rdquo;) will be comprised of an aggregate of 25% of the gross proceeds
generated from staking (&ldquo;Staking Consideration&rdquo;). Of the Sponsor&rsquo;s Staking Portion, the Sponsor will pay the Staking
Services Provider for their services under the Staking Services Agreement and the Trust&rsquo;s ether custodians in connection with staking
activities. The Trust will receive and retain the remainder of the gross Staking Consideration. Staking rewards will be added to the Trust&rsquo;s
assets and accrete to NAV, and NAV per share would be expected to increase. The Trust will not distribute its staking rewards directly
to Shareholders.</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B><U>The Sponsor has entered
into a Master Infrastructure-As-A-Service Agreement (the &ldquo;Staking Services Agreement&rdquo;) with Coinbase Crypto Services, LLC,
a Delaware limited liability company (&ldquo;Coinbase Crypto&rdquo;). Pursuant to that agreement, Coinbase Crypto will provide the Sponsor
with certain services, including the following, on any network protocol and/or blockchain that is supported by Coinbase:</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.25in">&nbsp;</TD>
    <TD STYLE="width: 0.25in; font-size: 10pt"><FONT STYLE="font-size: 10pt"><B><U>(i)</U></B></FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: justify"><FONT STYLE="font-size: 10pt"><B><U>staking, validating, generating or approving blocks of transactions to be added to a particular blockchain, helping to secure the network or otherwise engaging with or participating on the supported network;</U></B></FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.25in">&nbsp;</TD>
    <TD STYLE="width: 0.25in; font-size: 10pt"><FONT STYLE="font-size: 10pt"><B><U>(ii)</U></B></FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: justify"><FONT STYLE="font-size: 10pt"><B><U>support for eligible changes, improvements, extensions or other new versions thereof on the network; and</U></B></FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.25in">&nbsp;</TD>
    <TD STYLE="width: 0.25in; font-size: 10pt"><FONT STYLE="font-size: 10pt"><B><U>(iii)</U></B></FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: justify"><FONT STYLE="font-size: 10pt"><B><U>development, upgrades, migration, integration, testing, conversion, monitoring, maintenance, consulting, or other services and deliverables.</U></B></FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B><U>The Staking Services
Agreement with Coinbase Crypto has an initial term of two years, which automatically renews at the end of such a period.</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B><U>Under the Staking Services
Agreement, Coinbase Crypto may either act as a public validator or as a private dedicated validator in the Templated Solidity mempool
(the &ldquo;Tether Mempool&rdquo;). The Trust may, from time to time, and at any time, engage additional staking providers besides Coinbase
Crypto. The percentage of rewards to be paid to each such staking provider may vary and may be more or less than the amount paid by us
to Coinbase Crypto. Rewards from staking will be shared, distributed and added to the assets of the Trust periodically. Specifically,
staking rewards that accrue to the Trust on or before the calculation of the Trust&rsquo;s end-of-day NAV will be added to the assets
of the Trust, irrespective of whether the staked ether has been unbonded at such time.</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B><U>Staking requires that the Trust lock up the staked ether and become
subject to an unbonding period to unstake the staked ether, meaning that the Trust cannot transfer the staked ether during the time that
the ether is staked and during which it is being unbonded. The historical average unbonding period for staked ether was 4.91 days for
the one-year period ended on October 7, 2025. However, the unbonding period also may be longer than anticipated based on network activity.</U></B></P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

</DIV>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B></B></P>

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<DIV STYLE="padding: 5.4pt; border: Black 1.5pt solid">

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B><U>Due to the time involved
in &ldquo;exiting&rdquo; the staking process, there is a risk that the Trust could become unable to timely meet excessive redemption requests
in amounts that are greater than the portion of the Trust&rsquo;s ether that remains un-staked, leading to temporary delays in settlement
and, in extreme scenarios, the temporary unavailability of the Trust&rsquo;s redemption program. Moreover, any staked ether which must
be un-staked in order to fulfill a redemption (to the extent such redemption cannot be fulfilled utilizing the portion of the Trust&rsquo;s
ether that has not been staked, or through another mechanism to manage liquidity in connection with Redemption Orders) will be un-staked
only after the redemption request is approved by the Trust, the Sponsor executes an un-stake or withdrawal transaction through the Ether
Custodians, and such transaction is processed by the Ethereum Network. The Staking Provider will not be able to transfer unstaked ether
or Staking Provider Consideration to another address on the Ethereum network.</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B><U>In addition, depending
on the anticipated length of the unbonding period, the staked ether may be classified as illiquid under the Trust&rsquo;s liquidity risk
management program. In addition, if ether is determined to be a security under the Securities Act of 1933 (the &ldquo;1933 Act&rdquo;),
it could be subject to significant constraints in terms of any transfer or disposal of such ether. In such event, the Trust may consider
ether to be an &ldquo;illiquid security&rdquo;, which it defines as a security that the Trust reasonably expects cannot be sold or disposed
of in current market conditions in seven calendar days or less without the sale or disposition significantly changing the market value
of the security.</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B><U>There is no guarantee
that the Trust will receive any rewards with respect to staked ether. Past rewards are not indicative of future returns. The staking rewards
that the Trust may receive from staking ether, if any, may be affected by, among other factors:</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.25in">&nbsp;</TD>
    <TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10pt"><B><U>&#9679;</U></B></FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><B><U>the total amount of ether staked by users of the Ethereum Network;</U></B></FONT></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD>
    <TD><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD>
    <TD><FONT STYLE="font-size: 10pt"><B><U>&#9679;</U></B></FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><B><U>the total amount of ether staked by the Trust;</U></B></FONT></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD>
    <TD><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD>
    <TD><FONT STYLE="font-size: 10pt"><B><U>&#9679;</U></B></FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><B><U>changes to the Ethereum network as a result of protocol governance decisions;</U></B></FONT></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD>
    <TD><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD>
    <TD><FONT STYLE="font-size: 10pt"><B><U>&#9679;</U></B></FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><B><U>changes to Validator fees set by the Validators, including the commission charged by the Staking Services Provider (if any);</U></B></FONT></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD>
    <TD><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD>
    <TD><FONT STYLE="font-size: 10pt"><B><U>&#9679;</U></B></FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><B><U>halts, outages or other anticipated or unanticipated interruptions affecting the Ethereum network or third-party service providers involved in the staking of the Trust&rsquo;s ether;</U></B></FONT></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD>
    <TD><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD>
    <TD><FONT STYLE="font-size: 10pt"><B><U>&#9679;</U></B></FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><B><U>anticipated or unanticipated downtime by the Staking Services Provider;</U></B></FONT></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD>
    <TD><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD>
    <TD><FONT STYLE="font-size: 10pt"><B><U>&#9679;</U></B></FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><B><U>loss or deprivation of ether as a result of a violation of the Ethereum Network&rsquo;s rules by the Staking Services Provider;</U></B></FONT></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD>
    <TD><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD>
    <TD><FONT STYLE="font-size: 10pt"><B><U>&#9679;</U></B></FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><B><U>Validators ceasing to be eligible to participate in the Ethereum network&rsquo;s proof-of-stake protocol and earn rewards;</U></B></FONT></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD>
    <TD><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD>
    <TD><FONT STYLE="font-size: 10pt"><B><U>&#9679;</U></B></FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><B><U>&ldquo;bonding&rdquo;, &ldquo;unbonding&rdquo; or other ether lock-up periods specified by the Ethereum network;</U></B></FONT></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD>
    <TD><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD>
    <TD><FONT STYLE="font-size: 10pt"><B><U>&#9679;</U></B></FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><B><U>whether staking rewards are re-staked, either automatically by the Ethereum network or as part of the operational processes of the Trust or the Staking Services Provider; and</U></B></FONT></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD>
    <TD><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD>
    <TD><FONT STYLE="font-size: 10pt"><B><U>&#9679;</U></B></FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><B><U>delays or other operational factors related to or otherwise impacting the Trust&rsquo;s Staking Activities.</U></B></FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt; text-align: left"><B>&nbsp;</B></P>

</DIV>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt; text-align: left"><B></B></P>

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<DIV STYLE="padding: 5.4pt; border: Black 1.5pt solid">

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt; text-align: left"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B><U>Selling or Redeeming
Shares</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">When the Trust sells or redeems
its Shares, ether will be transferred into or out of the Trust, as applicable, in exchange for blocks of 10,000&nbsp;Shares (a &ldquo;Basket&rdquo;)
that are based on the quantity of ether attributable to each Share of the Trust (net of accrued but unpaid Sponsor Fees (defined below)
and any accrued but unpaid extraordinary expenses or liabilities).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">Financial firms that are authorized
to purchase Shares from or redeem Shares to the Trust (known as &ldquo;Authorized Participants&rdquo;) may purchase Shares in cash by
depositing cash in the Trust&rsquo;s account with the Cash Custodian. This will cause the Sponsor, on behalf of the Trust, to automatically
instruct a designated third party, who is not an Authorized Participant but who may be an affiliate of an Authorized Participant and with
whom the Sponsor has entered into an agreement on behalf of the Trust (each such third party, or the Prime Broker or Lender, as applicable,
an &ldquo;Ether Counterparty&rdquo;), to (i)&nbsp;purchase the amount of ether equivalent in value to the cash deposit amount associated
with the order and (ii)&nbsp;deposit the resulting ether amount in the Trust&rsquo;s account with the Ether Custodians, resulting in the
Transfer Agent crediting the applicable amount of Shares to the Authorized Participant. Authorized Participants may also purchase Shares
in-kind. To purchase Shares in-kind, an Authorized Participant delivers, or arranges for the delivery by the Authorized Participant&rsquo;s
designated agent of, ether to the Trust&rsquo;s account with the Ether Custodian in exchange for Shares.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">When such an Authorized Participant
redeems its Shares in cash, the Sponsor, on behalf of the Trust will direct the Ether Custodians to transfer ether to the Ether Counterparty,
who will sell the ether to be executed, in the Sponsor&rsquo;s reasonable efforts, at the Index price used by the Trust to calculate NAV,
taking into account any spread, commissions, or other trading costs and deposit the cash proceeds of such sale in the Trust&rsquo;s account
with the Cash Custodian for settlement with the Authorized Participant. Any slippage incurred (including, but not limited to, any trading
fees, spreads, or commissions, on a cash equivalent basis, will be the responsibility of the Authorized Participant and not of the Trust
or Sponsor. Authorized Participants may also redeem Shares in-kind. When such an Authorized Participant redeems Shares in-kind, the Trust,
through the Ether Custodian, will deliver ether to the Authorized Participant, or a designated agent thereof, in exchange for its Shares.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">The Ether Counterparty is a
designated third party with whom the Sponsor has entered into an agreement on behalf of the Trust that will deliver, receive or convert
to U.S. dollars the ether related to the Authorized Participant&rsquo;s cash creation or redemption orders. In connection with cash creation
orders, the Trust will create Shares by receiving ether from an Ether Counterparty that is not the Authorized Participant, and the Trust&nbsp;&mdash;&nbsp;not
the Authorized Participant&nbsp;&mdash;&nbsp;is responsible for selecting the Ether Counterparty to deliver the ether. Further, the Ether
Counterparty will not be acting as an agent of the Authorized Participant with respect to the delivery of the ether to the Trust or acting
at the direction of the Authorized Participant with respect to the delivery of the ether to the Trust. The Ether Counterparty is not contractually
obligated to participate in cash orders for creations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">In connection with ether redemption
orders, the Trust will redeem Shares by delivering ether to an Ether Counterparty that is not the Authorized Participant and the Trust&nbsp;&mdash;&nbsp;not
the Authorized Participant&nbsp;&mdash;&nbsp;is responsible for selecting the Ether Counterparty to receive the ether. Further, the Ether
Counterparty will not be acting as an agent of the Authorized Participant with respect to the receipt of the ether from the Trust.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">As of the date of this Prospectus,
the Authorized Participants are Jane Street Capital, LLC, Macquarie Capital (USA) Inc., ABN AMRO Clearing USA LLC and Virtu Americas LLC,
among others. As of the date of this Prospectus, the Prime Broker, Coinbase, Inc., and the Lender, Coinbase Credit, Inc., serve as Ether
Counterparties, among others. The Trust and/or Sponsor will bear the expense and risk of delivery and ownership of ether once such ether
has been received by the Ether Custodians on behalf of the Trust and until transferred by the Ether Custodians on behalf of the Trust
to the Ether Counterparty for conversion to cash.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">All of the Trust&rsquo;s ether
is held by the Ether Custodians. The Transfer Agent (as defined below) will facilitate the processing of purchase and sale orders in Baskets
to and from the Trust.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 4.5pt">&nbsp;</P>

</DIV>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 4.5pt"></P>

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<DIV STYLE="padding: 5.4pt; border: Black 1.5pt solid">

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 4.5pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt; text-align: left"><B>The Trust&rsquo;s Service Providers</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 4.5pt"><B>&nbsp;</B></P>

<P STYLE="margin: 0pt 0 0pt 0.25in; font: 10pt Times New Roman, Times, Serif; text-align: left"><B><I>The Staking Services
Provider</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 22.5pt"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0.25in; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt; text-align: justify"><B><U>Coinbase Crypto Services,
LLC serves as the Staking Services Provider to the extent the Sponsor determines to stake a portion of the Trust&rsquo;s ether.</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>The Trust&rsquo;s Fees and Expenses</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0.25in; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt; text-align: justify"><B><U>On October 8, 2025, the Sponsor agreed to voluntarily waive the fee
it receives from the Trust as compensation for the Sponsor&rsquo;s services rendered to the Trust for a period of one year beginning on
October 9, 2025 and ending on October 8, 2026.</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Custody of the Trust&rsquo;s Assets</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Federal Income Tax Considerations</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">It is expected that an owner
of Shares will be treated, for U.S.&nbsp;federal income tax purposes, as if they owned a proportionate share of the assets of the Trust.
A shareholder will accordingly include in the computation of their taxable income their proportionate share of the income <B><U>(including
staking income, as applicable)</U></B> and expenses realized by the Trust. Each sale or other disposition of ether by the Trust (including,
under current Internal Revenue Service (&ldquo;IRS&rdquo;) guidance, the use of ether to pay expenses of the Trust) will give rise to
gain or loss, and will therefore constitute a taxable event for Shareholders. <I>See &ldquo;United&nbsp;States Federal Income Tax Consequences&nbsp;&mdash;&nbsp;Taxation
of U.S.&nbsp;Shareholders.&rdquo;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Principal Investment Risks of an Investment
in the Trust</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">An investment in the Trust
involves a high degree of risk. Any investment made in the Trust may result in a total loss of the investment. There is no assurance that
the Trust will generate a profit for investors. Some of the risks you may face are summarized below. A more extensive discussion of these
risks appears beginning on page 13.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Risks Associated with the Tax Treatment of
Ether</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 48pt; text-align: justify; text-indent: -24pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left">&#9679;</TD><TD STYLE="text-align: justify">Shareholders could incur a tax liability without an associated
distribution of the Trust.</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 48pt; text-align: justify; text-indent: -24pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left">&#9679;</TD><TD STYLE="text-align: justify">The tax treatment of ether and transactions involving ether
for state and local tax purposes is not settled.</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 48pt; text-align: justify; text-indent: -24pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left">&#9679;</TD><TD STYLE="text-align: justify">A hard &ldquo;fork&rdquo; of the Ethereum blockchain could
result in Shareholders incurring a tax liability.</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 48pt; text-align: justify; text-indent: -24pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left">&#9679;</TD><TD STYLE="text-align: justify"><B><U>Ether staking may result in adverse tax consequences
for Shareholders.</U></B></TD>
</TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left">&#9679;</TD><TD STYLE="text-align: justify"><B><U>The treatment of staking in a grantor trust for U.S.
federal income tax purposes is still developing.</U></B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 48pt; text-align: justify; text-indent: -24pt">&nbsp;</P>

</DIV>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-variant: small-caps"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-variant: small-caps"><B>RISK
FACTORS</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><I>You should consider carefully
the risks described below before making an investment decision. You should also refer to the other information included in this Prospectus,
as well as information found in documents incorporated by reference in this Prospectus, before you decide to purchase any Shares. These
risk factors may be amended, supplemented or superseded from time to time by risk factors contained in any periodic report, prospectus
supplement, post-effective amendment or in other reports filed with the SEC in the future. See &ldquo;Glossary of Defined Terms&rdquo;
for an explanation of certain industry and technical terms used in this Prospectus.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Risks Associated with Ether and the Ethereum
Network</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 24pt; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="margin: 0pt 0 0pt 0.25in; font: 10pt Times New Roman, Times, Serif; text-align: left"><B><I>Moving from Proof-of-Work (PoW)
to Proof-of-Stake (PoS) Consensus Mechanism.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">In September&nbsp;2022, the
Ethereum network moved from a&nbsp;proof-of-work&nbsp;to a&nbsp;proof-of-stake&nbsp;mechanism called Serenity, or Ethereum 2.0. Unlike
proof-of-work, in which miners expend computational resources to compete to validate transactions and are rewarded coins in proportion
to the amount of computational resources expended, in proof-of-stake, validators risk or &ldquo;stake&rdquo; coins to compete to be randomly
selected to validate transactions and are rewarded coins in proportion to the total amount of coins staked. Any malicious activity, such
as disagreeing with the eventual consensus or otherwise violating protocol rules, results in the forfeiture or &ldquo;slashing&rdquo;
of a portion of the staked coins. <B><U>Should any of the Trust&rsquo;s Staking Services Providers engage in malicious activity or perform
poorly, then such Staking Services Providers may be blacklisted which could negatively impact the Trust&rsquo;s abilities to engage in
Staking Activities and/or otherwise result in the Trust earning reduced staking rewards. </U></B> Proof-of-stake is viewed as more energy
efficient and scalable than proof-of-work. There is no guarantee that the Ethereum community will embrace Ethereum 2.0, and the new protocol
may never fully scale.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">The possibility exists that
Ethereum 2.0 may never achieve the goals of the Ethereum community, which may have a negative impact on the market value of ether, and
consequently the NAV of the Trust.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 24pt; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><B><I><STRIKE>The inability to recognize
the economic benefit of Staking Activities could adversely impact an investment in the Trust.</STRIKE></I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><STRIKE>Currently, neither
the Trust, nor the Sponsor, nor the Ether Custodians, nor any other person associated with the Trust will, directly or indirectly, employ
any portion of the Trust&rsquo;s assets in actions where any portion of the Trust&rsquo;s ether becomes subject to the Ethereum proof-of-stake
validation or is used to earn additional ether or generate income or other earnings (&ldquo;Staking Activities&rdquo;). Accordingly, the
Trust currently does not derive any income from, or receive any form of staking rewards of any kind in connection with, or otherwise recognize
any economic benefit from, any Staking Activity. Upon receiving regulatory approval to do so, the Sponsor may, from time to time, stake
a portion of the Trust&rsquo;s ether on behalf of the Trust through one or more trusted staking providers.</STRIKE></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><STRIKE>Investors should be
aware that investing in Shares of the Trust differs significantly from investing ether directly or in an investment strategy that involves
the staking of ether. An investor in Shares of the Trust currently will not receive any additional income or ether rewards that they otherwise
may receive from Staking Activity. Foregoing potential returns from Staking Activities could cause an investment in the Shares to deviate
from that which would have been obtained by purchasing and holding ether directly by virtue of giving up staking as a source of return
when an investor holds the Shares. This may adversely impact the value of an investment in Shares of the Trust.</STRIKE></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 24pt; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><B><I>Staking introduces a risk of loss
of Ether, which could adversely affect the value of the Shares.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><STRIKE>Currently, neither
the Trust, nor the Sponsor, nor the Ether Custodians, nor any other person associated with the Trust will, directly or indirectly, employ
and Staking Activities. Upon receiving regulatory approval to do so, the Sponsor may, from time to time, stake a portion of the Trust&rsquo;s
ether on behalf of the Trust through one or more trysted staking providers.</STRIKE></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">Staking introduces a risk of
loss of Ether. None of the Trust&rsquo;s assets, including potentially staked assets, are subject to the protections enjoyed by depositors
or customers of institutions with FDIC or Securities Investor Protection Corporation membership. The Ethereum network imposes three types
of sanctions for validator misbehavior or inactivity, which would result in a portion of staked ether being destroyed or &ldquo;burned&rdquo;:
penalties, slashing and inactivity leaks.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt; text-align: left"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">A validator may face penalties
if it fails to take certain actions, such as providing a timely attestation to a block proposed by another validator. Under this scenario,
a validator&rsquo;s staked ether could be burned in an amount equal to the reward to which it would have been entitled for performing
the actions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">A more severe sanction
(i.e., &ldquo;slashing&rdquo;) is imposed if a validator commits malicious acts related to the proposal or attestation of blocks
with invalid transactions. Slashing can result in the validator having a portion of its staked ether immediately burned. After this
initial slashing, the validator is queued for forceful removal from the Ethereum network&rsquo;s validator &ldquo;pool,&rdquo; and
more of the validator&rsquo;s stake is burned over a period regardless of whether the validator makes any further slashable errors,
at which point the validator is automatically removed from the validator pool.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">Staked ether may also be burned
through a process known as an &ldquo;inactivity leak,&rdquo; which is triggered if the Ethereum protocol has gone too long without finalizing
a new block. For a new block to be successfully added to the blockchain, validators that account for at least two-thirds of all staked
ether must agree on the validity of a proposed block. This means that if validators representing more than one-third of the total staked
ether are offline, no new blocks can be finalized. To prevent this, an inactivity leak causes the ether staked by the inactive validators
to gradually &ldquo;bleed away&rdquo; until these inactive validators represent less than one-third of the total stake, thereby allowing
the remaining active validators to finalize proposed blocks. This provides a further incentive for validators to remain online and continue
performing validation activities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">There can be no guarantee that
penalties, slashing or inactivity leaks and resulting losses will not occur as a result of the Staking Activities, if they are undertaken.
Furthermore, a staking provider&rsquo;s liability to the Trust is limited, and a staking provider may lack the assets or insurance in
order to support the recovery of any losses incurred. There can be no guarantee that the Trust would recover any of its staked assets,
or the value thereof, if it is subject to sanctions imposed by the Ethereum network.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 24pt; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><B><I>Staked ether tokens will be inaccessible
for a variable period of time, determined by a range of factors, which could result in certain liquidity risk to the Trust.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><STRIKE>Upon receiving regulatory
approval to do so, the</STRIKE> <B><U>The </U></B>Sponsor may, from time to time, stake a portion of the Trust&rsquo;s ether on behalf
of the Trust through one or more <STRIKE>trusted staking providers</STRIKE> <B><U>Staking Services Providers</U></B>. Under current Ethereum
network protocols, staked ether tokens are permitted to be un-staked by the holder of such ether tokens. However, as part of the &ldquo;activating&rdquo;
and &ldquo;exiting&rdquo; processes of staking, staked ether tokens will be inaccessible for a variable period of time determined by a
range of factors, including network congestion, resulting in certain liquidity risks that the Sponsor plans to manage.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">&ldquo;Activation&rdquo; is
the funding of a validator to be included in the active set, thereby allowing the validator to participate in the Ethereum network&rsquo;s
proof-of-stake consensus protocol. &ldquo;Exit&rdquo; is the request to exit from the active set and no longer participate in the Ethereum
Network&rsquo;s proof-of-stake consensus protocol. As part of these &ldquo;activating&rdquo; and &ldquo;exiting&rdquo; processes of staking
on the Ethereum network, any staked ether will be inaccessible for a period of time. The duration of activating and exiting periods are
dependent on a range of factors, including network conditions. However, depending on demand, un-staking can take between&nbsp;hours,&nbsp;days
or&nbsp;weeks to complete. This can result in certain liquidity risk to the Trust, which the Sponsor will seek to manage through a range
of risk management methods.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">Even in the event the Trust
is then permitted to operate an ongoing redemption program due to the time involved in &ldquo;exiting&rdquo; the staking process there
is a risk that the Trust could become unable to timely meet excessive redemption requests in amounts that are greater than the portion
of the Trust&rsquo;s ether that remains un-staked, leading to temporary delays in settlement and, in extreme scenarios, the temporary
unavailability of the Trust&rsquo;s redemption program. Moreover, any staked ether which must be un-staked in order to fulfill a redemption
(to the extent such redemption cannot be fulfilled utilizing the portion of the Trust&rsquo;s ether that has not been staked) will be
un-staked only after the redemption request is approved by the Trust, the Sponsor executes an un-stake or withdrawal transaction, and
such transaction is processed by the Ethereum Network. The <STRIKE>staking provider</STRIKE> <B><U>Staking Services Provider</U></B> will
not be able to change the addresses on the Ethereum network to which staked ether is to be withdrawn or to which ether rewards shall be
sent.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt; text-align: left"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt; text-align: left"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><B><I>The Trust will be dependent on
third parties to effectively execute the Trust&rsquo;s Staking Activities.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><STRIKE>As the Sponsor currently
anticipates that Staking may be carried out by the Custodian, its affiliates, or third-party staking providers, the amount of staking
rewards that the Trust&rsquo;s staking activity will generate will be dependent on the performance of the staking provider, including
the adequacy and reliability of the hardware and software utilized by the staking provider. If the staking providers experience service
outages or otherwise are unable to optimally execute the staking of the Trust&rsquo;s Ether, the Trust&rsquo;s staking rewards may be
adversely affected.</STRIKE></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B><U>The amount of staking
rewards that the Trust&rsquo;s staking activity will generate will be dependent on the performance of the Staking Services Providers,
including the adequacy and reliability of the hardware and software utilized by the Staking Services Providers. If the Staking Services
Providers experience service outages or otherwise are unable to optimally execute the staking of the Trust&rsquo;s Ether, the Trust&rsquo;s
staking rewards may be adversely affected.</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B><I><U>The Trust will not
stake its ether until it has determined that the Sponsor in its sole discretion determines that the Trust may do so without undue legal
or regulatory risk, such as, without limitation, the risk of jeopardizing the Trust&rsquo;s ability to qualify as a grantor trust for
tax purposes, which could harm the value of the Shares.</U></I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B><U>The Trust&rsquo;s investment
objective is to seek to track the performance of ether, as measured by the performance of the Pricing Benchmark adjusted for the Trust&rsquo;s
expenses and other liabilities, and to reflect rewards from staking a portion of the Trust&rsquo;s ether, to the extent the Sponsor in
its sole discretion determines that the Trust may do so without undue legal or regulatory risk, such as, without limitation, the risk
of jeopardizing the Trust&rsquo;s ability to qualify as a grantor trust for tax purposes. If the Sponsor determines the Trust is not able
to so carry out staking activities, the Trust may cease some or all of its staking activities. Staking on the Ethereum network involves
delegating ether to validators and carries risks discussed further below. Staked ether may be subject to community-determined penalties
for validator misbehavior, or slashing. If the Staking Provider causes the Trust&rsquo;s staked ether to be subject to such slashing losses,
the Trust could suffer losses of the staked ether. Additionally, the staking process includes protocol-defined warm-up, activation and
withdrawal periods, during which staked ether is temporarily locked and inaccessible. These phases affect when ether begins earning rewards,
participates in consensus and becomes available for transfer or redelegation. </U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B><U>The Staking Provider
will stake the Trust&rsquo;s ether as the node operator and will operate a validator node to stake the Trust&rsquo;s ether. The Staking
Provider will perform its staking services in collaboration with the Ether Custodians, as the ether will be staked directly from the Trust&rsquo;s
ether accounts with the Ether Custodians. The Trust will maintain control of the ether while it is staked because it will remain in the
Trust&rsquo;s account with the Ether Custodians (i.e., it will be kept in a separate account for which the Trust is the beneficial and
record owner and will not be commingled with other parties&rsquo; accounts with the Ether Custodians). Staking will be a passive activity
for the Trust, as it will not operate its own staking program. The Trust&rsquo;s role will be limited to evaluating and contracting with
one or more Staking Providers and instructing the Staking Provider on when to stake and/or unstake the Trust&rsquo;s ether.</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B><U>The rewards owed or paid to the Ether Custodians as compensation for
the Staking Services Providers reduce the amount of ether rewards that are generated from the Trust&rsquo;s Staking Program that are available
as the assets of the Trust. Each Staking Services Provider that generates staking rewards will be entitled to Staking Provider Consideration.
The portion of the consideration paid to the Sponsor for arranging for the staking of the Trust&rsquo;s ether (the &ldquo;Sponsor&rsquo;s
Staking Portion&rdquo;) will be comprised of an aggregate of 25% of the gross proceeds generated from staking (&ldquo;Staking Consideration&rdquo;).
Of the Sponsor&rsquo;s Staking Portion, the Sponsor will pay the Staking Services Provider for their services under the Staking Services
Agreement and the Trust&rsquo;s ether custodians in connection with staking activities. The Trust will receive and retain the remainder
of the gross Staking Consideration. The staking rewards earned by the Trust will accrue to the Trust&rsquo;s account with the Ether Custodians
and will generally be staked in the same way as the Trust&rsquo;s already staked ether. Block rewards and transaction fees are not considered
staking rewards and will not accrete to the Trust.</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B><I><U>The Trust may be negatively
impacted by Staking Activities.</U></I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B><U>The Ethereum network
uses a proof-of-stake consensus mechanism to secure and operate the network, meaning that the voting power of a validator in the network
is determined by the amount of stake delegated to them by ether token holders. In proof-of-stake, validators risk or &ldquo;stake&rdquo;
coins to compete to be randomly selected to validate transactions and are rewarded coins in proportion to the total amount of coins staked.
The more stake delegated to a validator, the more voting power they have, the higher the likelihood is that the validator will be selected
to propose and validate blocks and the higher the associated reward will be. This, in turn, leads to higher ether earnings for the ether
tokenholders who chose to stake with the validator in question.&nbsp;</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B><U>If an ether tokenholder
chooses to engage in staking, they must either choose a specific validator to stake with or have sufficient ether to be selected as a
validator by the Ethereum network themselves. The choice of validator can potentially impact the amount of staking rewards the tokenholder
receives. The factors determining this amount include, but are not limited to:</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.25in">&nbsp;</TD>
    <TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10pt"><B><U>&#9679;</U></B></FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><B><U>Validator commission rate: a validator can choose to set a non-zero commission rate specifying the percentage of staking rewards they are taking from the stakers. For example, if a validator has a commission rate of 10%, then 10% of such staker&rsquo;s staking rewards are given to the validator. </U></B></FONT></TD></TR>
  </TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.25in">&nbsp;</TD>
    <TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10pt"><B><U>&#9679;</U></B></FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><B><U>Validator performance: a validator with bad performance will receive reduced staking rewards for the applicable period, and ether tokenholders who have delegated their stake to such validator will also receive reduced rewards for such period when they withdraw their stake from such validator.</U></B></FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B><U>If any Staking Services
Provider experiences operational or other difficulties, terminates their services, fails to comply with regulations, raises their prices
or disputes key intellectual property rights sold or licensed to, the Trust, the Trust could suffer losses. The Trust may also suffer
the consequences of such Staking Services Provider&rsquo;s mistakes. For example, if the Trust&rsquo;s Ether Custodians or Staking Services
Provider selected to act as validators fail to behave as expected, default, fail to perform, suffer cybersecurity attacks, experience
security issues or encounter other problems, the assets of the Trust may be irretrievably lost. The failure or capacity restraints of
vendors and services, a cybersecurity breach involving any service providers or the termination or change in terms or price or commission
rate of a vendor, third-party software license or service agreement on which the Trust relies, could disrupt the Trust&rsquo;s Staking
Activities or cause losses. Replacing any Staking Services Provider or addressing other issues with vendors and service providers could
entail significant delay, expense and disruption for the Trust. As a result, if these vendors and service providers experience difficulties,
are subject to cybersecurity breaches, terminate their services, dispute the terms of intellectual property agreements or raise their
prices, and the Sponsor is unable to replace them with other vendors and service providers, particularly on a timely basis, the Trust&rsquo;s
Staking Activities could be interrupted or disrupted, and the Trust could suffer a loss.</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B><U>The Ethereum network
dictates requirements for participation in the network&rsquo;s protocols and may reduce rewards if the relevant activities are not performed
correctly. Malicious or poorly performing validators may also be &ldquo;blacklisted&rdquo;, meaning that ether tokenholders may decide
to no longer delegate stake to such actors thereby resulting in such actors not being selected to validate and they would therefore be
unable to receive staking rewards therefrom. Should any of the Trust&rsquo;s Staking Services Providers engage in malicious activity or
perform poorly, then such Staking Services Providers may be blacklisted which could negatively impact the Trust&rsquo;s abilities to engage
in Staking Activities and/or otherwise result in the Trust earning reduced staking rewards.</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B><U>Staking requires that
the Trust lock up the staked ether and become subject to an unbonding period to unstake the staked ether, meaning that the Trust cannot
transfer the staked ether during the time that the ether is staked and during which it is being unbonded. The unbonding period may be
longer than anticipated based on network activity. Note that the duration of the bonding period may depend on a range of factors including
network load. </U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B><U>Due to the time involved
in &ldquo;exiting&rdquo; the staking process, there is a risk that the Trust could become unable to timely meet excessive redemption requests
in amounts that are greater than the portion of the Trust&rsquo;s ether that remains un-staked, leading to temporary delays in settlement
and, in extreme scenarios, the temporary unavailability of the Trust&rsquo;s redemption program. Moreover, any staked ether which must
be un-staked in order to fulfill a redemption (to the extent such redemption cannot be fulfilled utilizing the portion of the Trust&rsquo;s
ether that has not been staked, or through another mechanism to manage liquidity in connection with Redemption Orders) will be un-staked
only after the redemption request is approved by the Trust, the Sponsor executes an un-stake or withdrawal transaction through the Ether
Custodians, and such transaction is processed by the Ethereum network. The Staking Provider will not be able to transfer unstaked ether
or Staking Provider Consideration to another address on the Ethereum network. </U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B><U>In addition, depending
on the anticipated length of the unbonding period, the staked ether may be classified as illiquid under the Trust&rsquo;s liquidity risk
management program. In addition, if ether is determined to be a security under the 1933 Act, it could be subject to significant constraints
in terms of any transfer or disposal of such ether. In such event, the Trust may consider ether to be an &ldquo;illiquid security&rdquo;,
which it defines as a security that the Trust reasonably expects cannot be sold or disposed of in current market conditions in seven calendar
days or less without the sale or disposition significantly changing the market value of the security. </U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B><U>Rewards for staked ether
may be accrued even before the staked ether is unbonded. Once accrued, such ether rewards are considered part of the Trust&rsquo;s assets,
even if unbonding has not occurred. The Sponsor and the Trust will manage liquidity in accordance with the Trust&rsquo;s liquidity risk
policies and procedures and will monitor staking and bonding/unbonding activity closely on a daily basis. For more information on the
Trust&rsquo;s liquidity risk policies and procedures, see &ldquo;Staking of the Trust&rsquo;s Assets&mdash;Liquidity Risk Policies and
Procedures.&rdquo; </U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B><U>There is no guarantee
that the Trust will receive any rewards with respect to staked ether. Past rewards are not indicative of future returns. The staking rewards
that the Trust may receive from staking ether, if any, may be affected by, among other factors:</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.25in">&nbsp;</TD>
    <TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10pt"><B><U>&#9679;</U></B></FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><B><U>the total amount of ether staked by users of the Ethereum network;</U></B></FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.25in">&nbsp;</TD>
    <TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10pt"><B><U>&#9679;</U></B></FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><B><U>the total amount of ether staked by the Trust;</U></B></FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.25in">&nbsp;</TD>
    <TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10pt"><B><U>&#9679;</U></B></FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><B><U>changes to the Ethereum network as a result of protocol governance decisions; </U></B></FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.25in">&nbsp;</TD>
    <TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10pt"><B><U>&#9679;</U></B></FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><B><U>changes to validator fees or commission rates set by the validators, including the commission charged by the Staking Services Provider (if any);</U></B></FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.25in">&nbsp;</TD>
    <TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10pt"><B><U>&#9679;</U></B></FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><B><U>halts, outages or other anticipated or unanticipated interruptions affecting the Ethereum network or third-party service providers involved in the staking of the Trust&rsquo;s ether; </U></B></FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.25in">&nbsp;</TD>
    <TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10pt"><B><U>&#9679;</U></B></FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><B><U>anticipated or unanticipated downtime by the Staking Services Provider; </U></B></FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.25in">&nbsp;</TD>
    <TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10pt"><B><U>&#9679;</U></B></FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><B><U>loss or deprivation of ether as a result of a violation of the Ethereum network&rsquo;s rules by the Staking Services Provider; </U></B></FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.25in">&nbsp;</TD>
    <TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10pt"><B><U>&#9679;</U></B></FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><B><U>validators ceasing to be eligible to participate in the Ethereum network&rsquo;s proof-of-stake protocol and earn rewards; </U></B></FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.25in">&nbsp;</TD>
    <TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10pt"><B><U>&#9679;</U></B></FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><B><U>&ldquo;bonding&rdquo;, &ldquo;unbonding&rdquo; or other ether lock-up periods specified by the Ethereum network; and</U></B></FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.25in">&nbsp;</TD>
    <TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10pt"><B><U>&#9679;</U></B></FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><B><U>delays or other operational factors related to or otherwise impacting the Trust&rsquo;s Staking Activities. </U></B></FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 24pt; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><B><I><U>The Staking Provider may not
optimally execute the staking activities.</U></I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B><U>The Trust relies on the
resources of the Staking Provider to facilitate the Sponsor&rsquo;s staking activities. The Staking Provider will provide the hardware,
software and services necessary to stake the ether from a validator node. The hardware and software utilized by the Staking Provider may
prove to be inadequate to maximize the Trust&rsquo;s staking revenue. The Trust is dependent on the hardware, software and services of
the Staking Provider to effectively execute the staking activities. The Sponsor will have no ability to supervise or direct the conduct
of the Staking Provider. </U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B><U>In addition, the Staking
Provider Consideration will be paid from the proceeds of the staking program received by the Trust. The payment of the Staking Provider
Consideration will reduce the portion of the staking rewards generated by the staking activities that are actually retained by the Trust.
Accordingly, the staking rewards actually retained by the Trust will likely be less than what the Trust would retain if the Sponsor were
to administer its own staking activities without the assistance of third-party service providers.</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 24pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 24pt; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 24pt; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><B><I><U>The Trust may vary the amount
of ether to be staked and the rewards received may accordingly change from time to time.</U></I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B><U>While the Trust may stake
a maximum of 100% of its ether holdings, the amount of ether that remains unstaked is determined based on the Trust&rsquo;s Utilization
Rate analysis, and accordingly may vary from time to time. Based on Utilization Rate analysis applied to historical data, the Trust generally
intends to stake between 40% and 70% of the ether it holds, although the amount of ether that is staked may be lesser or greater from
time to time. The precise percentage to be staked will be based on the estimated liquidity needs of the Trust, as determined by the Sponsor.
Accordingly, changes in the percentage of ether holdings that are staked could impact the value of Shares held by investors.</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><B><I>Validators may suffer losses due
to staking, which could make the Ethereum network less attractive.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">Validation on the Ethereum
network requires ether to be transferred into smart contracts on the underlying blockchain networks not under the Trust&rsquo;s or anyone
else&rsquo;s control. If the Ethereum network source code or protocol fail to behave as expected, suffer cybersecurity attacks or hacks,
experience security issues, or encounter other problems, such assets may be irretrievably lost. In addition, the Ethereum networks dictate
requirements for participation in validation activity, and may impose penalties, or &ldquo;slashing,&rdquo; if the relevant activities
are not performed correctly, such as if the staker acts maliciously on the network, &ldquo;double signs&rdquo; any transactions, or experience
extended downtimes. <B><U>Such penalties include the reduction of staking rewards for malicious actors and poorly performing validators
and the &ldquo;blacklisting&rdquo; of such actors which may result in ether tokenholders no longer delegating their stakes to such actors
thereby resulting in such actors not being selected to validate in the future. Should any of the Trust&rsquo;s Staking Services Providers
engage in malicious activity or perform poorly, then such Staking Services Providers may be blacklisted which could negatively impact
the Trust&rsquo;s abilities to engage in Staking Activities and/or otherwise result in the Trust earning reduced staking rewards.</U></B>
If validators&rsquo; staked ether are slashed by the Ethereum network, their assets may be confiscated, withdrawn, or burnt by the network,
resulting in losses to them. Furthermore, the Ethereum network requires the payment of base fees and the practice of paying tips is common,
and such fees can become significant as the amount and complexity of the transaction grows, depending on the degree of network congestion
and the price of ether. Any cybersecurity attacks, security issues, hacks, penalties, slashing events, or other problems could damage
validators&rsquo; willingness to participate in validation, discourage existing and future validators from serving as such, and adversely
impact the Ethereum network&rsquo;s adoption or the price of ether. Any disruption of validation on the Ethereum network could interfere
with network operations and cause the Ethereum network to be less attractive to users and application developers than competing blockchain
networks, which could cause the price of ether to decrease.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B><I><U>The Sponsor&rsquo;s
receipt of a portion of staking rewards may create conflicts of interest.</U></I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B><U>The Sponsor&rsquo;s Staking Portion will be comprised of an aggregate
of 25% of the Staking Consideration. Of the Sponsor&rsquo;s Staking Portion, the Sponsor will pay the Staking Services Provider for their
services under the Staking Services Agreement and the Trust&rsquo;s ether custodians in connection with staking activities. The Trust
will receive and retain the remainder of the gross Staking Consideration. This arrangement creates a financial incentive for the Sponsor
to maximize the amount of ether staked by the Trust, as higher levels of staked ether would generally result in greater staking rewards
to the Sponsor. However, the Sponsor&rsquo;s interest in maximizing staking rewards may conflict with the Trust&rsquo;s need to maintain
sufficient liquid ether to meet redemption requests and other operational requirements. If the Sponsor directs the Trust to stake excessive
amounts of ether relative to the Trust&rsquo;s liquidity needs, the Trust could become unable to timely meet redemption requests in amounts
that are greater than the portion of the Trust&rsquo;s ether that remains unstaked, leading to temporary delays in settlement and, in
extreme scenarios, the temporary unavailability of the Trust&rsquo;s redemption program.</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B><U>While the Trust&rsquo;s
staking policies are designed to balance expected yield against potential risks and is based on various factors including historical redemption
patterns and liquidity analysis, the Sponsor has sole discretion in determining the amount of ether to stake. Shareholders have no ability
to influence or override the Sponsor&rsquo;s determinations regarding staking levels. The Sponsor&rsquo;s financial interest in staking
rewards may cause it to prioritize staking income over maintaining adequate liquidity reserves, particularly during periods when staking
yields are attractive relative to the costs and risks of maintaining liquid ether reserves.</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B><U>Any inability to meet
redemption requests in a timely manner due to excessive staking could harm Authorized Participants&rsquo; ability to effectively arbitrage
the Trust&rsquo;s Shares, potentially causing the Shares to trade at significant premiums or discounts to NAV. This could result in Shareholders
being unable to exit their positions at fair value or being forced to accept delays in redemption processing, either of which could cause
substantial losses to Shareholders.</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Tax Risk</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 24pt; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><B><I>The ongoing activities of the Trust
may generate tax liabilities for Shareholders.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">It is expected that each Shareholder
will include in the computation of their taxable income their proportionate share of the taxable income and expenses of the Trust, including
gains and losses realized in connection with the use of ether to pay Trust expenses or facilitate redemption transactions<B><U>, as well
as any amounts received in connection with staking, as applicable</U></B>. The Trust does not anticipate making distributions to Shareholders,
so any tax liability that a Shareholder incurs as a result of holding Shares will need to be satisfied from some other source of funds.
If a Shareholder sells Shares in order to raise funds to satisfy such a tax liability, the sale itself may generate additional taxable
gain or loss.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B><I><U>Ether staking may
result in adverse tax consequences for Shareholders.</U></I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B><U>To the extent the Sponsor
determines to stake a portion of the Trust&rsquo;s ether, the staking of the Trust&rsquo;s ether is expected to result in the Trust&rsquo;s
receipt of amounts received in connection with staking in the form of additional ether. Any such rewards are expected to be treated as
ordinary income for U.S. federal income tax purposes. Thus, the Trust&rsquo;s receipt of rewards derived from ether staking activities
could result in beneficial owners of Shares incurring tax liability without an associated distribution from the Trust. Additionally, the
Trust&rsquo;s receipt of amounts received in connection with staking could have implications for investors sensitive to unrelated business
taxable income, U.S. withholding taxes or taxable income effectively connected with a U.S. trade or business. The U.S. federal income
tax treatment of staking may change from that described in this Prospectus, possibly with retroactive effect.</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B><I><U>The treatment of staking
in a grantor trust for U.S. federal income tax purposes is still developing.</U></I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B><U>As a grantor trust, the
Trust can undertake only certain types of activities. For example, generally, the Trust cannot vary its investment portfolio to take advantage
of market fluctuations. The Trust may receive income from investment activities that do not require such decision-making. The federal
income tax treatment of staking for grantor trust purposes is uncertain pending additional IRS guidance. If the Trust were viewed as undertaking
the types of activities that would not be allowable for U.S. federal income tax purposes, then the Trust could lose its income tax status
as a grantor trust, and the Trust could be reclassified as a partnership. If the Trust were reclassified as a partnership, a more complex
reporting regime would apply, and Shareholders would receive a Form K-1. If the Trust were reclassified as a partnership but did not satisfy
a safe harbor or exception to the publicly traded partnership rules, it could be reclassified as a corporation, which would subject the
Trust to corporate level tax, and the Shareholder&rsquo;s return on investment would likely be affected.</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-variant: small-caps"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-variant: small-caps"><B>THE TRUST
AND ETHER PRICES</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><U>Staking</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B><U>Staking requires that
the Trust lock up the staked ether and become subject to an unbonding period to unstake the staked ether, meaning that the Trust cannot
transfer the staked ether during the time that the ether is staked and during which it is being unbonded. The unbonding period also may
be longer than anticipated based on network activity. Note that the duration of the bonding period may depend on a range of factors including
network load. </U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B><U>Due to the time involved
in &ldquo;exiting&rdquo; the staking process, there is a risk that the Trust could become unable to timely meet excessive redemption requests
in amounts that are greater than the portion of the Trust&rsquo;s ether that remains un-staked, leading to temporary delays in settlement
and, in extreme scenarios, the temporary unavailability of the Trust&rsquo;s redemption program. Moreover, any staked ether which must
be un-staked in order to fulfill a redemption (to the extent such redemption cannot be fulfilled utilizing the portion of the Trust&rsquo;s
ether that has not been staked, or through another mechanism to manage liquidity in connection with Redemption Orders) will be un-staked
only after the redemption request is approved by the Trust, the Sponsor executes an un-stake or withdrawal transaction through the Custodian,
and such transaction is processed by the Ethereum Network. The Staking Provider will not be able to transfer unstaked ether or Staking
Provider Consideration to another address on the Ethereum network. </U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B><U>In addition, depending
on the anticipated length of the unbonding period, the staked ether may be classified as illiquid under the Trust&rsquo;s liquidity risk
management program. In addition, if ether is determined to be a security under the 1933 Act, it could be subject to significant constraints
in terms of any transfer or disposal of such ether. In such event, the Trust may consider ether to be an &ldquo;illiquid security&rdquo;,
which it defines as a security that the Trust reasonably expects cannot be sold or disposed of in current market conditions in seven calendar
days or less without the sale or disposition significantly changing the market value of the security. </U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B><U>Rewards for staked ether
may be accrued in a period even before the staked ether is unbonded. Once accrued, such ether rewards are considered part of the Trust&rsquo;s
assets, even if unbonding has not occurred. The Sponsor and the Trust will manage liquidity in accordance with the Trust&rsquo;s liquidity
risk policies and procedures and will monitor staking and bonding/unbonding activity closely on a daily basis. For more information on
the Trust&rsquo;s liquidity risk policies and procedures, see &ldquo;Staking of the Trust&rsquo;s Assets&mdash;Liquidity Risk Policies
and Procedures.&rdquo;</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-variant: small-caps">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-variant: small-caps"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-variant: small-caps"><B>ADDITIONAL
INFORMATION ABOUT THE TRUST</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>The Trust&rsquo;s Fees and Expenses</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B><U>On October 8, 2025, the Sponsor agreed to voluntarily waive the fee
it receives from the Trust as compensation for the Sponsor&rsquo;s services rendered to the Trust for a period of one year beginning on
October 9, 2025 ending on October 8, 2026.</U></B></P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-variant: small-caps"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-variant: small-caps"><B>THE TRUST&rsquo;S
SERVICE PROVIDERS</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><U>Staking Services Provider</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B><U>Coinbase Crypto Services,
LLC serves as the Staking Services Provider to the extent the Sponsor determines to stake a portion of the Trust&rsquo;s ether.</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-variant: small-caps"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-variant: small-caps"><B>CUSTODY
OF THE TRUST&rsquo;S ASSETS</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">Ether held in the Trust&rsquo;s
account with the Ether Custodians is the property of the Trust. The Trust, the Sponsor and the service providers will not loan or pledge
the Trust&rsquo;s assets<B><U>, including staked assets,</U></B> nor will the Trust&rsquo;s assets<B><U>, including staked assets,</U></B>
serve as collateral for any loan or similar arrangement, other than in connection with the Post-Trade Financing Agreement (as defined
below). The Trust will not utilize leverage, derivatives or any similar arrangements in seeking to meet its investment objective.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-variant: small-caps"><B><U>STAKING
OF THE TRUST&rsquo;S ASSETS</U></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B><U>The Trust&rsquo;s staking
model aims to maximize the portion of the Trust&rsquo;s ether available for staking while controlling for liquidity and redemption risks.
The model determines an optimal Utilization Rate by balancing expected yield against potential costs (including borrowing costs during
redemptions, assuming we have access to suitable credit).</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B><U>The Staking Services
Provider will exercise no discretion as to the amount of the Trust&rsquo;s ether to be staked or the timing of the Staking Activities.&nbsp;While
the Trust may stake a maximum of 100% of its ether holdings, the amount of ether that remains unstaked is determined based on the Trust&rsquo;s
Utilization Rate analysis, and accordingly may vary from time to time. Based on Utilization Rate analysis applied to historical data,
the Trust generally intends to stake between 40% and 70% of the ether it holds, although the amount of ether that is staked may be lesser
or greater from time to time. The precise percentage to be staked will be based on the estimated liquidity needs of the Trust, as determined
by the Sponsor. In determining how to stake the ether held by the Trust, and how much ether to stake, the Trust&rsquo;s model operates
on the following key parameters:</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.25in">&nbsp;</TD>
    <TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10pt"><B><U>&#9679;</U></B></FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><B><U>Unbonding period: The number of days required for unbonding staked assets as dictated by the Ethereum protocol;</U></B></FONT></TD></TR>
  </TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.25in">&nbsp;</TD>
    <TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10pt"><B><U>&#9679;</U></B></FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><B><U>ETF Historical redemption patterns: The historical percentages of cumulative drawdowns in redemptions during the bonding period for US listed ETFs and other similar instruments listed abroad;</U></B></FONT></TD></TR>
  </TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.25in">&nbsp;</TD>
    <TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10pt"><B><U>&#9679;</U></B></FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><B><U>Size of the Trust &amp; Concentration: A trust with a high concentration of shareholders may have a higher percentage risk of redemption compared to a trust has a diversified shareholder base and a large number of assets under management;</U></B></FONT></TD></TR>
  </TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.25in">&nbsp;</TD>
    <TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10pt"><B><U>&#9679;</U></B></FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><B><U>Staking Services Provider performance: The model takes into account the performance, reliability, and reputation of staking services providers. This includes adherence to certain minimum operating standards, including monitoring their uptime, and slashing history; and</U></B></FONT></TD></TR>
  </TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.25in">&nbsp;</TD>
    <TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10pt"><B><U>&#9679;</U></B></FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><B><U>Market conditions monitoring: The model tracks market conditions, like regime shifts in momentum/liquidity, conditions of heightened demand or supply, network events and protocol changes, staking services provider risks.</U></B></FONT></TD></TR>
  </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B><U>The Trust intends to
make available on its website the current percentage of the Trust&rsquo;s ether being staked on a daily basis.&nbsp;</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B><U>The rewards owed or paid to the Ether Custodians as compensation for
the Staking Services Providers reduce the amount of ether rewards that are generated from the Trust&rsquo;s Staking Program that are available
in the assets of the Trust. Each Staking Services Provider that generates staking rewards will be entitled to compensation determined
as a portion of the staking rewards, which is generally expected to be determined by a fixed percentage of the overall rewards amount
(the &ldquo;Staking Provider Consideration&rdquo;). The Sponsor&rsquo;s Staking Portion will be comprised of an aggregate of 25% of the
Staking Consideration. Of the Sponsor&rsquo;s Staking Portion, the Sponsor will pay the Staking Services Provider for their services under
the Staking Services Agreement and the Trust&rsquo;s ether custodians in connection with staking activities. The Trust will receive and
retain the remainder of the gross Staking Consideration. Staking rewards will be added to the Trust&rsquo;s assets and accrete to NAV,
and NAV per share would be expected to increase. The Trust will not distribute its staking rewards directly to Shareholders.</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B><U>The Sponsor has entered
into the Staking Services Agreement with Coinbase Crypto. Pursuant to that agreement, Coinbase Crypto will provide the Sponsor with certain
services, including the following, on any network protocol and/or blockchain that is supported by Coinbase:</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.25in">&nbsp;</TD>
    <TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10pt"><B><U>(i)</U></B></FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><B><U>staking, validating, generating or approving blocks of transactions to be added to a particular blockchain, helping to secure the network or otherwise engaging with or participating on the supported network;</U></B></FONT></TD></TR>
  </TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.25in">&nbsp;</TD>
    <TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10pt"><B><U>(ii)</U></B></FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><B><U>support for eligible changes, improvements, extensions or other new versions thereof on the network; and</U></B></FONT></TD></TR>
  </TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.25in">&nbsp;</TD>
    <TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10pt"><B><U>(iii)</U></B></FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><B><U>development, upgrades, migration, integration, testing, conversion, monitoring, maintenance, consulting, or other services and deliverables.</U></B></FONT></TD></TR>
  </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B><U>The Staking Services
Agreement with Coinbase Crypto has an initial term of two years which, automatically renews at the end of such a period. Under the Staking
Services Agreement, Coinbase Crypto may either act as a public validator or as a private dedicated validator in the Tether Mempool. The
Trust may, from time to time, and at any time, engage additional staking providers besides Coinbase Crypto. The percentage of rewards
to be paid to each such staking provider may vary and may be more or less than the amount paid by us to Coinbase Crypto. Rewards from
staking will be shared, distributed and added to the assets of the Trust periodically. Specifically, staking rewards that accrue to the
Trust on or before the calculation of the Trust&rsquo;s end-of-day NAV will be added to the assets of the Trust, irrespective of whether
the staked ether has been unbonded at such time.</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><U>Liquidity Risk Policies and Procedures </U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B><U>The Trust balances earning
staking rewards with maintaining liquidity to meet redemptions. To do so, the Sponsor sets a target range for the portion of assets staked
(&ldquo;Utilization Rate&rdquo; or &ldquo;UR&rdquo;), which is based on factors including lock-up periods, historical and stressed redemption
activity, Trust size, projected staking yields, staking provider reliability, secondary market liquidity, and broader market conditions.
The Trust&rsquo;s target UR range is determined by analyzing a broad set of factors, including:</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.25in">&nbsp;</TD>
    <TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10pt"><B><U>&#9679;</U></B></FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><B><U>protocol-specific lock-up or unbonding periods, and whether such periods are fixed or variable; </U></B></FONT></TD></TR>
  </TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.25in">&nbsp;</TD>
    <TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10pt"><B><U>&#9679;</U></B></FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><B><U>the Trust&rsquo;s historical redemption activity during comparable lock-up horizons;</U></B></FONT></TD></TR>
  </TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.25in">&nbsp;</TD>
    <TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10pt"><B><U>&#9679;</U></B></FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><B><U>drawdowns observed in correlated assets under similar timeframes;</U></B></FONT></TD></TR>
  </TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.25in">&nbsp;</TD>
    <TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10pt"><B><U>&#9679;</U></B></FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><B><U>the size of the Trust&rsquo;s assets under management;</U></B></FONT></TD></TR>
  </TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.25in">&nbsp;</TD>
    <TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10pt"><B><U>&#9679;</U></B></FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><B><U>the concentration and distribution of the investor base;</U></B></FONT></TD></TR>
  </TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.25in">&nbsp;</TD>
    <TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10pt"><B><U>&#9679;</U></B></FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><B><U>expected staking yields and how they evolve over time;</U></B></FONT></TD></TR>
  </TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.25in">&nbsp;</TD>
    <TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10pt"><B><U>&#9679;</U></B></FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><B><U>the reliability and performance of staking providers, including uptime and slashing history;</U></B></FONT></TD></TR>
  </TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.25in">&nbsp;</TD>
    <TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10pt"><B><U>&#9679;</U></B></FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><B><U>secondary market indicators such as share trading volume, bid-ask spreads, and premiums/discounts; and</U></B></FONT></TD></TR>
  </TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.25in">&nbsp;</TD>
    <TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10pt"><B><U>&#9679;</U></B></FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><B><U>broader forward-looking market conditions, including liquidity regimes, network events, and protocol upgrades.</U></B></FONT></TD></TR>
  </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B><U>Staked assets may be
considered restricted during their unbonding period, while unstaked assets remain, and are considered, liquid. We monitor these factors
daily under both normal and stressed market conditions. If redemption activity pushes the staked portion above our target range, we will
initiate un-staking to bring the Trust back within its liquidity parameters.</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B><U>The Trust has written
liquidity risk policies and procedures reasonably designed to address the redemption risks specified in the generic listing standards.
In accordance with the generic listing standards, those liquidity policies address:</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.25in">&nbsp;</TD>
    <TD STYLE="width: 0.25in; font-size: 10pt"><FONT STYLE="font-size: 10pt"><B><U>&#9679;</U></B></FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: justify"><FONT STYLE="font-size: 10pt"><B><U>&#8239;the Trust&rsquo;s investment strategy and liquidity of the Trust&rsquo;s assets during normal and stressed conditions, including holdings in derivatives and whether the investment strategy is appropriate for effective and efficient arbitrage;</U></B></FONT></TD></TR>
  </TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.25in">&nbsp;</TD>
    <TD STYLE="width: 0.25in; font-size: 10pt"><FONT STYLE="font-size: 10pt"><B><U>&#9679;</U></B></FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: justify"><FONT STYLE="font-size: 10pt"><B><U>holdings of cash and cash equivalents, as well as borrowing arrangements and other funding sources; and</U></B></FONT></TD></TR>
  </TABLE>

<P STYLE="text-align: justify; margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.25in">&nbsp;</TD>
    <TD STYLE="width: 0.25in; font-size: 10pt"><FONT STYLE="font-size: 10pt"><B><U>&#9679;</U></B></FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: justify"><FONT STYLE="font-size: 10pt"><B><U>the percentage and description of the Trust&rsquo;s assets that are segregated, pledged, hypothecated, encumbered, or otherwise restricted or prevented from being liquidated, sold, transferred, or assigned.</U></B></FONT></TD></TR>
  </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B><U>The Trust is permitted to hold only the underlying ether, but
to the extent the Sponsor in its sole discretion determines that the Trust may do so without undue legal or regulatory risk, such as,
without limitation, the risk of jeopardizing the Trust&rsquo;s ability to qualify as a grantor trust for tax purposes, the Trust may enter
into derivatives, cash and cash equivalents and borrowing arrangements and other funding sources.</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B>Prime
BRoker</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">Other than in connection with
the Post-Trade Financing Agreement, (1)&nbsp;the Trust, the Sponsor and the service providers will not loan or pledge the Trust&rsquo;s
assets<B><U>, including staked assets,</U></B> nor will the Trust&rsquo;s assets<B><U>, including staked assets,</U></B> serve as collateral
for any loan or similar arrangement, other than in connection with the Post-Trade Financing Agreement; and (2)&nbsp;the Trust will not
utilize leverage, derivatives or any similar arrangements in seeking to meet its investment objective.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-variant: small-caps"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-variant: small-caps"><B>CREATION
AND REDEMPTION OF SHARES</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Creation Procedures</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">Ether held in the Trust&rsquo;s
account with the Ether Custodians is the property of the Trust. The Trust, the Sponsor and the service providers will not loan or pledge
the Trust&rsquo;s assets<B><U>, including staked assets</U></B><U>,</U> nor will the Trust&rsquo;s assets<B><U>, including staked assets,</U></B>
serve as collateral for any loan or similar arrangement, other than in connection with the Post-Trade Financing Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Redemption Procedures</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">Ether held in the Trust&rsquo;s
account with the Ether Custodians is the property of the Trust. The Trust, the Sponsor and the service providers will not loan or pledge
the Trust&rsquo;s assets<B><U>, including staked assets,</U></B> nor will the Trust&rsquo;s assets<B><U>, including staked assets,</U></B>
serve as collateral for any loan or similar arrangement, other than in connection with the Post-Trade Financing Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-variant: small-caps"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-variant: small-caps"><B>OTHER
MATERIAL CONTRACTS</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><U>Staking Services Agreement</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B><U>Pursuant to the Staking
Services Agreement, the Staking Services Provider is generally responsible for providing blockchain-network infrastructure and related
services to the Trust. The Staking Services Provider&rsquo;s obligations include (i) maintaining full nodes for each supported blockchain
network; (ii) processing Trust transactions to the applicable network; (iii) monitoring network health and performance and notifying the
Trust and Sponsor of any service interruptions or degradations; and (iv) providing diagnostic, corrective and development support as reasonably
requested by the Trust and Sponsor.</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B><U>The Staking Services
Agreement will remain in effect until terminated by either party upon sixty (60) days&rsquo; prior written notice to the other party,
subject to any &ldquo;unbonding period&rdquo; or other limitations imposed by the applicable supported blockchain network protocol. The
Staking Services Agreement may be terminated (in whole, or in respect of any Order Schedule) by a party (a) if the other party materially
breaches a provision of the Staking Services Agreement and fails to cure such breach within ten (10) days (five (5) days in the case of
non-payment) after receiving written notice of such breach from the non-breaching party or (b) immediately upon written notice if the
other party (i) is in material breach of any applicable law or regulation or (ii) is or becomes subject to any bankruptcy, insolvency,
or similar proceeding or makes an assignment for the benefit of creditors. Upon expiration or termination, all accrued payment and other
obligations survive.</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B><U>The Trust has agreed
to indemnify, defend and hold harmless the Staking Services Provider and its affiliates, and their respective officers, directors, employees
and agents from and against any and all losses, liabilities, damages, costs and expenses (including reasonable attorneys&rsquo; fees)
related to: (i) any claim or action that arises from or relates to the Trust&rsquo;s breach of any material representation or warranty
made under the Staking Services Agreement; (ii) any claim or action brought by a third party that is related to or arises from the Trust&rsquo;s
(including its affiliates, authorized users, representatives and end users) (a) breach of any material obligation under the Staking Services
Agreement; (b) unauthorized or improper use of the Staking Services Provider&rsquo;s services; or (c) gross negligence or intentional
misconduct, including but not limited to any failure to abide by applicable law or regulatory requirements as reasonably known by the
industry at the time the acts in question are committed; (iii) arising from or related to a breach of applicable privacy or data protection
laws with respect to the Trust&rsquo;s end users, except to the extent caused by the Staking Service Provider&rsquo;s gross negligence
or intentional misconduct; and (iv) any tax liability, including penalties, duties and interest levied by any government on the Participatory
Rewards (other than taxes based on Coinbase&rsquo;s net income).</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B><U>The Staking Services
Provider has agreed to defend, indemnify and hold harmless the Trust and its affiliates, officers, directors, employees, agents, shareholders,
successors and permitted assigns from and against any and all settlement amounts or direct damages, liabilities, costs and expenses (including
reasonable attorneys&rsquo; fees) arising out of any third-party claim that (a) that the Staking Services Provider&rsquo;s platform infringes
a valid U.S. patent, or other U.S. intellectual property right of such third party, unless arising from or related to, in whole or in
part, the Sponsor&rsquo;s gross negligence, intentional misconduct or misuse of the Staking Services Provider&rsquo;s platform; or (b)&nbsp;directly
caused by the gross negligence or intentional misconduct of, including failure to abide by applicable law or regulatory requirements as
reasonably known by the industry at the time the acts in question are committed.</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-variant: small-caps"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-variant: small-caps"><B>UNITED
STATES FEDERAL INCOME TAX CONSEQUENCES</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Taxation of the Trust</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">The Sponsor and the Trustee
will treat the Trust as a &ldquo;grantor trust&rdquo; for U.S.&nbsp;federal income tax purposes. <B><U>As a grantor trust, the Trust can
undertake only certain types of activities. For example, generally, the Trust cannot vary its investment portfolio to take advantage of
market fluctuations. The Trust may receive income from investment activities that do not require such decision-making. If staking is treated
for U.S. federal income tax purposes as a passive ministerial and administrative activity, it should be permissible for the Trust. In
the opinion of Dechert LLP, although</U></B> not free from doubt due to the lack of directly governing authority, <STRIKE>if the Trust
operates as expected, </STRIKE>the Trust should be classified as a &ldquo;grantor trust&rdquo; for U.S.&nbsp;federal income tax purposes
(and the following discussion assumes such classification).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B><U>The Trust intends to
operate so that it will qualify to be treated for U.S. federal income tax purposes as a grantor trust. Because the treatment of staking
in a grantor trust is still developing, there remains a risk of adverse regulatory or legal determinations that could affect the tax treatment
of the Trust as a grantor trust or affect the Trust&rsquo;s operations. The opinion of Dechert LLP is based on various assumptions and
representations relating to the Trust&rsquo;s organization, operation, assets, activities, and income, including that all such assumptions
representations on which the opinion is based and all other factual information set forth in the relevant documents, records, and instruments
are true and correct, that all actions described in this offering are completed in a timely fashion and that the Trust will at all times
operate in accordance with the method of operation described in the Trust&rsquo;s organizational documents and this offering.</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B><U>The opinion of Dechert
LLP is not binding on the IRS or any court. Accordingly, there</U></B> can be no assurance that the IRS will agree with the conclusions
herein and it is possible that the IRS or another tax authority could assert a position contrary to one or all of those conclusions and
that a court could sustain that contrary position. Neither the Sponsor nor the Trustee will request a ruling from the IRS with respect
to the classification of the Trust for U.S.&nbsp;federal income tax purposes or with respect to any other matter. If the IRS were to assert
successfully that the Trust is not classified as a &ldquo;grantor trust,&rdquo; the Trust would likely be classified as a partnership
for U.S.&nbsp;federal income tax purposes, which may affect the timing and other tax consequences to the Shareholders. Under such circumstances,
the Trust might be classified as a publicly traded partnership that would be taxable as a corporation for U.S.&nbsp;federal income tax
purposes, in which case the Trust would be taxed in the same manner as a corporation on its taxable income and distributions to Shareholders
out of the earnings and profits of the Trust would be taxed to Shareholders as ordinary dividend income. However, due to the uncertain
treatment of digital currency for U.S.&nbsp;federal income tax purposes, there can be no assurance in this regard. Except as otherwise
indicated, the remainder of this discussion assumes that the Trust is classified as a grantor trust for U.S.&nbsp;federal income tax purposes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Taxation of U.S.&nbsp;Shareholders</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B><U>To the extent the Sponsor
determines to stake a portion of the Trust&rsquo;s ether, if the Trust were to receive staking rewards, any such staking rewards received
by the Trust is expected to be treated as taxable income and reportable to Shareholders based on the Trust&rsquo;s interpretation of current
IRS guidance. The Trust&rsquo;s receipt of amounts received in connection with staking could have implications for investors sensitive
to unrelated business taxable income. Such investors should consult their own tax advisers as to the tax consequences from these activities.</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Taxation in Jurisdictions Other Than the United&nbsp;States</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">Prospective purchasers of Shares
that are based in or acting out of a jurisdiction other than the United&nbsp;States are advised to consult their own tax advisers as to
the tax consequences under the laws of such jurisdiction (or any other jurisdiction other than the United&nbsp;States in which they are
subject to taxation) of their purchase, holding, sale and redemption of or any other dealing in Shares and, in particular, as to whether
any value added tax, other consumption tax or transfer tax is payable in relation to such purchase, holding, sale, redemption or other
dealing.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><B><U>To the extent the Sponsor
determines to stake a portion of the Trust&rsquo;s ether, the Trust&rsquo;s receipt of amounts received in connection with staking could
be subject to U.S. withholdings at source or have implications for investors sensitive to taxable income effectively connected with a
U.S. trade or business. Such investors should consult their own tax advisers as to the tax consequences from these activities.</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-variant: small-caps"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-variant: small-caps"><B>APPENDIX
A</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>GLOSSARY OF DEFINED TERMS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In this Prospectus, each of the following terms
have the meanings set forth after such term:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&ldquo;Advisers Act&rdquo;: The Investment Advisers
Act of 1940.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&ldquo;1933 Act&rdquo;: The Securities Act of
1933.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&ldquo;1940 Act&rdquo;: Investment Company Act
of 1940.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&ldquo;Administrator&rdquo;: The Bank of New York
Mellon.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&ldquo;Authorized Participant&rdquo;: One that
purchases or redeems Baskets from or to the Trust.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&ldquo;Basket&rdquo;: A block of 10,000 Shares
used by the Trust to issue or redeem Shares.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&ldquo;Basket Deposit&rdquo;: The total deposit
required to create each Basket.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&ldquo;Blockchain&rdquo; or &ldquo;Ethereum blockchain&rdquo;:
The public transaction ledger of the Ethereum network on which validators or validator pools stake ether allowing them to be selected
to add records of recent transactions (called &ldquo;blocks&rdquo;) to the chain of transactions in exchange for an award of ether from
the Ethereum network and the payment of transaction fees, if any, from users whose transactions are recorded in the block being added.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&ldquo;Business Day&rdquo;: Any day other than
a day when the Exchange or the New York Stock Exchange is closed for regular trading.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&ldquo;CEA&rdquo;: Commodity Exchange Act of 1936.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&ldquo;CFTC&rdquo;: Commodity Futures Trading
Commission, an independent agency with the mandate to regulate commodity futures and options in the United States.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&ldquo;Code&rdquo;: Internal Revenue Code of 1986,
as amended.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&ldquo;DTC&rdquo;: The Depository Trust Company.
DTC will act as the securities depository for the Shares.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&ldquo;DTC Participant&rdquo;: An entity that
has an account with DTC.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&ldquo;Ether&rdquo;: A digital asset based on
the decentralized, open-source protocol of the&nbsp;peer-to-peer&nbsp;Ethereum computer network.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&ldquo;Ether Counterparty&rdquo;: Designated third
party, who is not an Authorized Participant but who may be an affiliate of an Authorized Participant, or the Prime Broker or Lender, as
applicable, with whom the Sponsor has entered into an agreement on behalf of the Trust, that will, acting as a counterparty, deliver,
receive or convert to U.S. dollars the ether related to the Authorized Participant&rsquo;s creation or redemption order.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&ldquo;Ether Custodians&rdquo;: Coinbase Custody
Trust Company, LLC., Bitgo New York Trust Company, LLC, and Anchorage Digital Bank N.A.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&ldquo;Ethereum&rdquo;: The open-source, decentralized,
peer-to-peer Ethereum network, and the system as a whole that is involved in maintaining the ledger of ether ownership and facilitating
the transfer of ether among parties</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&ldquo;Ethereum blockchain&rdquo;: The blockchain
ledger for Ethereum.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&ldquo;Exchange&rdquo;: Cboe BZX Exchange, Inc.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&ldquo;Exchange Act&rdquo;: The Securities Exchange
Act of 1934, as amended.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&ldquo;FDIC&rdquo;: Federal Deposit Insurance
Corporation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&ldquo;FINRA&rdquo;: Financial Industry Regulatory
Authority, formerly the National Association of Securities Dealers.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&ldquo;GAAP&rdquo;: U.S. generally accepted accounting
principles.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&ldquo;Indirect Participants&rdquo;: Banks, brokers,
dealers and trust companies that clear through or maintain a custodial relationship with a DTC Participant, either directly or indirectly.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&ldquo;Incidental Rights&rdquo;: Rights to acquire,
or otherwise establish dominion and control over, any virtual currency or other asset or right, which rights are incident to the Trust&rsquo;s
ownership of ether and arise without any action of the Trust, or of the Sponsor on behalf of the Trust.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&ldquo;IRS&rdquo;: U.S. Internal Revenue Service.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&ldquo;IR Virtual Currency&rdquo;: Virtual currency
tokens, or other assets or rights, acquired by the Trust through the exercise (subject to the applicable provisions of the Trust Agreement)
of any Incidental Right.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&ldquo;Lender&rdquo;: Coinbase Credit, Inc.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&ldquo;Marketing Agent&rdquo;: Foreside Global
Services, LLC.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&ldquo;NAV&rdquo;: Net asset value of the Trust.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&ldquo;NFA&rdquo;: National Futures Association.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&ldquo;OCC&rdquo;: Office of the Comptroller of
the Currency.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&ldquo;Prime Broker&rdquo;: Coinbase, Inc.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&ldquo;Principal Market NAV&rdquo;: Net asset
value of the Trust determined on a GAAP basis.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&ldquo;Principal Market NAV per Share&rdquo;:
Net asset value of the Trust per Share determined on a GAAP basis.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&ldquo;Redemption Order Date&rdquo;: The date
a redemption order is received in satisfactory form by the Marketing Agent.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&ldquo;Register&rdquo;: The record of all Shareholders
and holders of the Shares in certificated form kept by the Administrator.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&ldquo;SEC&rdquo;: The U.S. Securities and Exchange
Commission.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&ldquo;Seed Capital Investor&rdquo;: 21Shares
US LLC.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&ldquo;Seed Creation Baskets&rdquo;: Shares of
the Trust purchased by the Seed Capital Investor.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&ldquo;Shares&rdquo;: Common shares representing
fractional undivided beneficial interests in the Trust.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&ldquo;Shareholders&rdquo;: Holders of Shares.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&ldquo;SIPC&rdquo;: Securities Investor Protection
Corporation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&ldquo;Staking Activities&rdquo;: employing any
portion of the Trust&rsquo;s assets in actions where any portion of the Trust&rsquo;s ether becomes subject to the Ethereum proof-of-stake
validation or is used to earn additional ether or generate income or other earnings.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&ldquo;Sponsor&rdquo;: 21Shares US LLC, a Delaware
limited liability company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><U>&ldquo;Sponsor&rsquo;s Staking Portion&rdquo;:
The portion of the consideration paid to the Sponsor for arranging for the staking of the Trust&rsquo;s ether.</U></B></P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><U>&ldquo;Staking Activities&rdquo;: The process
by which third parties engaged by the Sponsor stake a portion of the Trust&rsquo;s ether.</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><U>&ldquo;Staking Consideration&rdquo;: The
gross proceeds generated from staking the Trust&rsquo;s ether.</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><U>&ldquo;Staking Provider Consideration&rdquo;:
Compensation determined as a portion of the staking rewards provided to each Staking Services Provider that generates staking rewards.</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><U>&ldquo;Staking Services Agreement&rdquo;:
A Master Infrastructure-As-A-Service Agreement between the Sponsor and Coinbase Crypto where Coinbase Crypto has agreed to provide the
Sponsor with certain services, including: (i) staking, validating, generating or approving blocks of transactions to be added to a particular
blockchain, helping to secure the network or otherwise engaging with or participating on the supported network; (ii) support for eligible
changes, improvements, extensions or other new versions thereof on the network; and (iii) development, upgrades, migration, integration,
testing, conversion, monitoring, maintenance, consulting, or other services and deliverables. Such services will be provided on any network
protocol and/or blockchain that is supported by Coinbase.</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><U>&ldquo;Staking Services Provider&rdquo;:
A third party engaged by the Sponsor to engage in Staking Activities.</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&ldquo;Transfer Agent&rdquo;: The Bank of New
York Mellon.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&ldquo;Trust&rdquo;: 21Shares Ethereum ETF.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&ldquo;Trust Agreement&rdquo;: Amended and Restated
Trust Agreement of 21Shares Ethereum ETF.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&ldquo;Trustee&rdquo;: CSC Delaware Trust Company,
a Delaware trust company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><U>&ldquo;Utilization Rate&rdquo;: A target
range for the portion of assets staked, which is set by the Sponsor and which is based on factors including lock-up periods, historical
and stressed redemption activity, Trust size, projected staking yields, staking provider reliability, secondary market liquidity, and
broader market conditions.</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&ldquo;You&rdquo;: The owner or holder of Shares.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></P>

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