Grayscale plans to introduce regular cash distributions from staking rewards earned by its Ethereum and Solana exchange-traded funds.
Summary
- Grayscale plans quarterly cash distributions from staking rewards earned through its Ethereum and Solana exchange-traded funds.
- ETHE and GSOL payouts will vary based on rewards, operating expenses, fees and tax treatment.
- ETHE previously distributed $9.39 million after converting accumulated Ethereum staking rewards into shareholder cash payments.
The asset manager disclosed the proposed changes in separate July 17 filings for the Grayscale Ethereum Staking ETF, or ETHE, and the Grayscale Solana Staking ETF, or GSOL.
Under the planned trust amendments, each fund would sell the ETH or SOL received from staking and distribute the net cash proceeds to shareholders. Grayscale would complete that process no less often than quarterly.
The company expects to execute the amendments “on or around August 7, 2026,” according to the filings. However, the notices do not set a fixed payment date or guaranteed distribution amount.
ETHE and GSOL would convert staking rewards into cash
The proposed system would require both trusts to convert staking consideration into cash at least once each quarter. They would then pay shareholders after deducting expenses that Grayscale does not cover.
Those deductions could include part of the staking rewards paid to Grayscale for arranging and managing the staking process. The final amount would depend on the rewards each trust receives during the relevant period.
Grayscale stated that the distribution amounts “cannot be predicted with certainty.” Ethereum and Solana staking rewards can change due to network conditions, validator performance and the amount of assets staked.
The trusts may also make payments more often than once per quarter. The proposed agreements set a minimum frequency rather than a fixed calendar or annual yield.
As a result, investors could compare the actual net cash paid by ETHE and GSOL over the same reporting periods. However, the funds would not promise matching yields or equal distributions.
ETHE previously paid $9.39 million to shareholders
The planned framework follows an earlier cash distribution from ETHE. In January 2026, the fund converted Ethereum staking rewards earned between Oct. 6 and Dec. 31, 2025, into cash.
ETHE paid shareholders about $0.083178 per share, with the total distribution reaching roughly $9.39 million. The payment showed how staking rewards could pass through a listed Ethereum product without distributing ETH directly.
ETHE became the first U.S.-listed spot crypto exchange-traded product to pass Ethereum staking proceeds directly to investors through a cash payment.
Grayscale added staking to its Ethereum and Solana products in October 2025. The company said the structure would give shareholders exposure to the underlying digital assets while allowing the trusts to earn network rewards.
Crypto.news reported at the time that ETHE, the Ethereum Mini Trust ETF and GSOL would add staking capabilities.
Meanwhile, GSOL began trading on NYSE Arca in October 2025 after operating as a closed-end trust. Grayscale initially planned to pass 77% of its net Solana staking rewards into the fund’s net asset value.
As previously reported, the product launched with more than $102 million in assets and had staked close to 75% of its SOL holdings.
IRS rules shape the proposed distribution schedule
Grayscale said the proposed amendments would help ETHE and GSOL comply with IRS Revenue Procedure 2025-31. The guidance outlines conditions under which certain trusts may stake digital assets while retaining grantor trust status for U.S. federal tax purposes.
The procedure allows a qualifying trust to distribute net staking rewards either in digital assets or in cash after a sale. It also requires consistent distributions no less frequently than quarterly.
Grayscale selected the cash option for both funds. Therefore, ETHE would sell ETH rewards, while GSOL would sell SOL rewards before distributing the remaining proceeds.
The SEC disclosures also warn that receiving cash does not necessarily determine when a shareholder records taxable income. Under the proposed grantor trust treatment, U.S. investors may recognize their share of staking rewards when the trust receives them.
That tax event could occur before the investor receives the later cash distribution. In addition, selling ETH or SOL to fund a payout could create a capital gain or loss allocated to shareholders.
Grayscale advised investors to consult tax advisers about their individual circumstances. The company has not provided a projected yield for either product.
Quarterly payments could make fund returns easier to compare
The common payment schedule would give ETHE and GSOL investors a clearer record of how much cash each fund generates from staking after fees and expenses.
Investors could compare distribution amounts, payment timing and expense deductions across Ethereum and Solana products. Still, the results would depend on each network’s staking economics and the amount of assets the trusts place with validators.
Other fund managers have also moved toward staking-based crypto products. BlackRock’s Ethereum staking product expected to distribute rewards monthly or at least quarterly.
Institutional interest in regulated staking exposure has also grown. As crypto.news reported in May, Dartmouth disclosed holdings in both a Solana staking ETF and Grayscale’s Ethereum staking product.
Grayscale must still complete the trust amendments before the recurring framework takes effect. If executed around August 7, the changes would establish quarterly minimum distribution schedules for both ETHE and GSOL.
The first payment dates and amounts remain unknown. They will depend on staking rewards, fund expenses, sales of ETH or SOL and the tax rules applied during each distribution period.
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