According to separate July 17 filings, Grayscale plans to introduce regular cash distributions from staking rewards earned through its Ethereum and Solana exchange-traded funds. Under the proposed trust amendments, each fund would sell the ETH or SOL received from staking and distribute the net cash proceeds to shareholders at least once per quarter. The company expects to execute these amendments on or around August 7, 2026, though the notices do not set a fixed payment date or guaranteed distribution amount. As per the filings, the proposed structure would make recurring cash distributions a mechanism, with Grayscale able to distribute more frequently than quarterly, depending on actual staking rewards received during each period. The amounts cannot be predicted with certainty, so the regularity applies to the process rather than the outcome. The amendments would also revise trust agreements to support the ETFs' staking programs and implement a mandatory distribution framework for staking rewards.
The planned framework follows an earlier successful cash distribution from ETHE. In January 2026, the fund converted Ethereum staking rewards earned between October 6 and December 31, 2025, into cash, paying shareholders approximately $0.083178 per share with the total distribution reaching roughly $9.39 million. ETHE became the first U.S.-listed spot crypto exchange-traded product to pass Ethereum staking proceeds directly to investors through a cash payment, demonstrating how staking rewards could pass through a listed Ethereum product without distributing ETH directly. The January distribution showed staking rewards converted into cash for shareholders, with the proposed structure adding GSOL and creating a like-for-like basis for comparing actual net cash payouts, disclosed expense drag and timing across Ethereum and Solana. The common payment schedule would provide investors with clearer records of cash generation from staking after fees and expenses.
As of July 17, ETHE reported net assets of $1.22 billion while GSOL had $101.3 million in assets under management. The funds' current staking yields show significant differences, with ETHE generating 2.67% on an annual basis and GSOL delivering 6.10% annually. Grayscale added staking features to both products on October 6, 2025, becoming the first US digital-asset fund manager to introduce staking to spot ETPs. If adopted, the structure would let retail investors receive staking income in cash through brokerage accounts without directly holding crypto, selecting validators or managing staking operations themselves.
According to the filings, the proposed amendments would help ETHE and GSOL comply with IRS Revenue Procedure 2025-31, which outlines conditions under which certain trusts may stake digital assets while retaining grantor trust status for U.S. federal tax purposes. The procedure allows qualifying trusts to distribute net staking rewards either in digital assets or cash after a sale, requiring consistent distributions no less frequently than quarterly. Grayscale selected the cash option for both funds, with ETHE selling ETH rewards while GSOL sells SOL rewards before distributing the remaining proceeds. The changes will take effect after 20 days' prior notice to shareholders, after which the firm plans to disclose how cash distributions will operate for each fund. The amendment is intended to comply with Internal Revenue Service rules allowing staking rewards to be received without tax withholding. Before distributions are made, the trusts may deduct expenses not assumed by the sponsor, including compensation paid to Grayscale for facilitating staking arrangements. The filings note that quarterly cash distributions will not delay U.S. tax obligations, with shareholders generally recognizing staking rewards as taxable income when the trusts receive them, while selling ETH or SOL to fund the payouts could also result in capital gains or losses.
