Grayscale Investments is moving its Ethereum and Solana staking funds to a mandatory cash-distribution model, requiring both products to pay shareholders net proceeds from staking rewards no less often than quarterly.
Separate ETHE and GSOL filings dated July 17 set the proposed amendments for around August 7. Staking rewards will be converted into U.S. dollars and distributed after sponsor charges, validator costs, custody fees and other expenses not covered by Grayscale.
ETHE already makes cash payments from staking income, but the amendment replaces a discretionary schedule with a minimum quarterly requirement. GSOL will begin regular distributions once its amended trust agreement takes effect.
The changes are designed to keep both products within IRS Revenue Procedure 2025-31, which sets conditions for grantor trusts engaging in staking. Distribution amounts will vary with network rewards, the proportion of assets staked, validator performance, fund expenses and the market value of ETH or SOL when rewards are converted into cash.
ETHE distributed $14.39 million during the first quarter, including $0.083178 per share in January, $0.025709 in February and $0.021011 in March. The fund sold part of the ETH earned through staking to fund each payment.
Grayscale’s March 31 fund materials listed $1.78 billion in assets and 71% of ETHE’s holdings in staking arrangements. The percentage can change as the fund manages redemptions, liquidity and unstaking delays.
The quarterly mandate gives investors a clearer route for receiving staking income rather than leaving rewards inside the trust indefinitely. It also makes cash yield easier to compare across the growing market for staking-enabled Ethereum products, where net returns depend on both network issuance and the portion retained by fund operators.
GSOL’s first mandatory distributions will follow a June fee reduction that lowered its annual sponsor fee from 0.35% to 0.19%. Grayscale also cut its share of gross staking rewards from 23% to 7%, leaving a larger portion of staking income inside the fund before cash distributions.
The Solana fund recorded $2.2 million in staking reward income during the first quarter and held about $105.1 million in net assets at March 31. GSOL had not operated under a mandatory shareholder-distribution schedule during that reporting period.
Grayscale’s changes sharpen competition with proposed ETH and SOL funds carrying lower headline fees and staking features. Morgan Stanley’s planned products, for example, have added 0.14% pricing to the ETF race, increasing pressure on issuers to compete through both operating costs and the share of staking rewards delivered to investors.
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