Proposed Changes to Trust Agreements

Grayscale Investments intends to update the governing documents for its Grayscale Ethereum Staking ETF (ETHE) and Grayscale Solana Staking ETF (GSOL). The amendments, detailed in recent SEC filings, would require the trusts to convert staking rewards into cash and distribute net proceeds to investors no less frequently than once per quarter.

The changes are scheduled to take effect on or around August 7 following the required shareholder notice period. This formalizes a process that Grayscale has already begun implementing for its Ethereum product on an ad hoc basis.

Building on Existing Staking Practices

Grayscale first enabled staking for both ETHE and GSOL on October 6, 2025, marking an early move among U.S. crypto fund issuers to incorporate on-chain rewards into spot exchange-traded products. For ETHE, the firm executed its initial cash distribution from staking rewards on January 5, paying approximately $0.08 per share for a total of about $9.39 million.

The new structure shifts from rewards primarily contributing to net asset value growth toward direct cash payments after the sale of accrued ETH or SOL rewards. Expenses, including sponsor fees and staking-related costs not covered by Grayscale, will be deducted before distributions occur.

Fund Performance and Yield Details

As of mid-July, ETHE held roughly $1.22 billion in net assets with gross staking rewards reported at 2.67%. GSOL, with approximately $101 million in assets, showed stronger gross yields of 6.1%. Recent fee reductions for the Solana product, including a drop in the staking fee from 23% to 7% and sponsor fee adjustments, aim to improve net returns passed to investors.

Grayscale has noted that actual distribution amounts will vary based on network conditions, the volume of assets staked, validator performance, and applicable deductions. No fixed payout levels or schedules beyond the quarterly minimum have been specified.

Implications for Investors

The move allows holders of the exchange-traded products to receive staking-derived income directly in cash through their brokerage accounts, without needing to manage crypto custody or validator operations themselves. This approach aligns the products more closely with traditional income-generating investment vehicles.

Both funds stake a substantial portion of their holdings—GSOL reportedly near 100%—positioning them to capture ongoing network rewards. However, investors should anticipate fluctuations in payouts and consider consulting tax professionals, as distributions may carry ordinary income implications.