Grayscale Investments, a digital asset management company known for its suite of crypto-themed investment trusts, has proposed changing how staking income flows to shareholders in two of its exchange-traded products.
The firm wants its Ethereum Staking ETF (ETHE) and Solana Staking ETF (GSOL) to convert staking rewards into cash and distribute them to investors at least quarterly.
The plan was disclosed through separate Form 8-K filings submitted to the Securities and Exchange Commission (SEC) on July 17, with the amended trust agreements expected to take effect around August 7.
If finalized, the change would create a standing schedule for returning staking-generated income to fund holders rather than leaving rewards to accumulate within the trust.
Under the revised terms, both trusts would be required to turn ETH and SOL rewards earned through staking into cash and pass on the net amount to shareholders no less than every quarter.
Before payouts reach investors, the funds may subtract costs not already covered by Grayscale, including fees tied to running the staking operations. Because the size of each distribution hinges entirely on how much reward income the trusts generate during a given period, Grayscale has been clear that exact payout figures cannot be forecast in advance.
Nothing here guarantees a set dollar amount each quarter, only that a payment will happen at minimum every three months, with the option for Grayscale to distribute more often if it sees fit.
Beyond simply adding a payout calendar, the proposed changes are also designed to bring the trust structures in line with IRS Revenue Procedure 2025-31, a rule that spells out how grantor trusts can engage in staking activities without jeopardizing their federal tax treatment.
That guidance permits qualifying trusts to hand back staking income either as raw digital assets or as converted cash, so long as distributions happen quarterly at a minimum. Grayscale has chosen the cash route for both funds.
Investors shouldn’t expect any change to their tax timeline. Staking rewards will still count as taxable income the moment the trusts receive them, assuming grantor trust status holds, and any ETH or SOL sold off to cover the cash payouts could trigger separate capital gains or losses.
Grayscale maintains the amendments won’t harm shareholders and is giving the standard 20-day notice period before the changes go live. Once the updated agreements are executed, the firm plans to release revised prospectus supplements along with additional disclosures covering tax implications and risk factors, giving investors a clearer picture before the new payout structure begins.
Grayscale Plans Quarterly Cash Payouts From ETH and SOL Staking Rewards
According to CryptoSlate, Grayscale plans to amend the trust agreements for its Ethereum Staking ETF (ETHE) and Solana Staking ETF (GSOL), allowing ETH and SOL staking rewards to be converted into cash and… pic.twitter.com/JstIqeNalq
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