Grayscale plans regular cash payouts from ETH, SOL staking rewards Grayscale plans to establish regular cash distributions from staking rewards generated by its Ether and Solana exchange-traded products.

Grayscale, an asset manager, plans to implement regular cash distributions from the staking rewards generated by its Ether (ETH) and Solana (SOL) exchange-traded products (ETPs). The firm intends to amend the trust agreements for its Grayscale Solana Staking ETF (GSOL) and Grayscale Ethereum Staking ETF (ETHE) around August 7, requiring the trusts to convert staking rewards into cash at least quarterly and distribute the net proceeds to shareholders. This move aims to give investors recurring access to staking yields without the need to directly manage crypto holdings or staking operations.

The amendments filed with the US Securities and Exchange Commission (SEC) clarify that distribution amounts will vary and are not predictable, as they depend on the staking rewards earned during each period and any expenses deducted by the trusts. Grayscale previously made its first ETHE staking distribution on January 5, paying approximately $0.08 per share from the sale of staking rewards. The company initially enabled staking for these ETH and SOL funds on October 6, 2022, marking the first time a US crypto fund issuer added staking features to spot crypto ETPs.

As of the latest data, the ETHE fund held $1.22 billion in net assets while GSOL had $101.13 million. The Ethereum fund’s gross staking rewards stood at 2.67% as of July 17, whereas the Solana fund offered higher gross rewards at 6.10%. Grayscale emphasizes that the amendment aligns with IRS tax guidance, allowing these funds to earn staking rewards without losing their current tax status. The amendment process includes a 20-day notice period for shareholders and plans to update fund disclosures to explain how the regular cash payouts will operate once the changes are implemented.

Grayscale also noted that expenses, including a portion of staking rewards paid to the sponsor for facilitating staking activities, may be deducted before distributions are made. Importantly, the distribution framework does not guarantee consistent or equal payouts each quarter, as rewards fluctuate based on staked assets and network conditions. The company presents this approach as a way to make staking returns more accessible to traditional investors through brokerage-held products without requiring them to handle the complexities of staking directly.