Grayscale to Pay Quarterly Cash From ETH and SOL Staking Rewards: A Look at The Mechanics

Grayscale plans to amend its Ethereum Staking exchange-traded fund (ETHE) and Solana Staking ETF (GSOL) to convert staking rewards into cash and distribute them to shareholders at least once a quarter.

Key Takeaways

• Grayscale filing seeks to convert ETHE and GSOL staking rewards into quarterly cash payouts starting around Aug. 7.
• GSOL currently stakes 100% of its SOL, generating roughly 6.1% in gross annual staking rewards.
• Ethereum trades near $1,857 and Solana near $75.89, both down under 1% over 24 hours.

The Filing

Onchain analyst Wu Blockchain relayed the update in a post on X, citing that the proposed amendments would require the trusts to distribute “net staking rewards consistently either in kind or after a cash sale no less frequently than quarterly.”

If adopted, each trust would convert the ether ( ETH) or solana ( SOL) it earns through staking into cash at least quarterly and promptly distribute the proceeds after covering expenses not already absorbed by the sponsor. The change is intended to take effect around Aug. 7, giving investors a predictable payout calendar instead of ad hoc distributions.

The mechanics carry real precedent since ETHE’s January 2026 distribution paid roughly $0.083 per share, totaling about $9.39 million, an early example of what a standardized quarterly cadence might look like at scale going forward.

How Much Investors Actually Get

The new schedule fixes timing, not amounts and payouts will still swing with how much ETH or SOL the trusts actually stake, how much is consumed by fees, and each fund’s tax treatment. Under grantor-trust rules, U.S. holders would recognize their pro rata share of staking rewards as taxable income when the trust receives them (regardless of when cash later lands in shareholder accounts), while any ETH or SOL sold to fund a distribution could separately trigger capital gains or losses.

GSOL’s underlying yield gives a sense of what is on the table, given that the fund stakes 100% of its SOL holdings, currently generating gross staking rewards of about 6.1% annually, though the amount converted to cash and paid out will be net of fees and any tax withholding.

Grayscale also cut costs on the solana side this year because, effective June 25, GSOL’s sponsor fee dropped from 0.35% to 0.19%, while its staking fee also fell from 23% to 7%, leaving more of that yield with shareholders.

A Crowded Field for Staking ETFs

Grayscale’s move lands amid intensifying competition to offer staking-enabled crypto exchange-traded funds (ETFs). Morgan Stanley filed its own S-1 amendments for spot ether and solana ETFs in July, naming Coinbase as custodian and staking provider at a 0.14% sponsor fee, with the ether trust planning to stake 50% to 80% of its holdings and the solana trust as much as 100%.

Bitcoin.com News also reported that Grayscale’s original solana ETF launch with staking drew a headline yield north of 77% in its early days, before normalizing toward current levels.

The distribution question has become a competitive front of its own, since a predictable quarterly cash payout is easier for advisors and retail holders to model than reward accruals that show up unevenly inside a fund’s net asset value.

That said, the amendments still need to clear standard SEC review before Aug. 7, and the first quarterly distributions under the new structure would follow in the months after. Ether is currently trading near $1,857 and solana near $75.89, both down slightly over the past 24 hours.