Grayscale is preparing to distribute staking rewards directly to investors in its Ethereum and Solana exchange-traded funds. The proposed changes could transform the products into income-generating investments similar to traditional dividend-paying ETFs.
According to amendments filed with the U.S. Securities and Exchange Commission on July 17, 2026, holders of the Grayscale Ethereum Staking ETF and the Grayscale Solana Staking ETF could receive staking rewards as quarterly cash payments.
Previously, staking income remained inside the funds and gradually increased their net asset value per share. Under the revised structure, Grayscale would convert the rewards into U.S. dollars and distribute the proceeds directly to shareholders.
Cash Payments to Replace NAV Growth
Until now, investors benefited from staking rewards indirectly through increases in the funds’ net asset values. The updated model would make those earnings more visible by paying them out in cash at least once every quarter.
Grayscale may also choose to issue distributions more frequently. However, the final payment received by shareholders will be calculated after deducting fund expenses, sponsor fees and staking-related charges.
The company previously tested a similar approach with its Ethereum fund. Earlier in 2026, Grayscale distributed approximately $9.39 million in Ethereum staking rewards, equal to around $0.083 per share. Those rewards were generated during the final months of 2025.
That initial Ethereum payout appears to have created a framework that can now be extended to the company’s Solana investment product.
GSOL Generates a 6.1% Gross Staking Yield
The Grayscale Solana Staking ETF began trading on NYSE Arca in October 2025. The fund currently stakes almost all of the SOL tokens it holds.
As of mid-July 2026, GSOL managed approximately $97 million in assets. Its Solana holdings generated an estimated gross annualized staking yield of 6.10%.
After accounting for fees and other costs, the fund’s estimated net yield was approximately 5.03%.
These returns are not guaranteed. Solana staking yields can change depending on network activity, validator performance and broader market conditions.
Major Fee Reductions Improve Investor Returns
Grayscale also introduced significant GSOL fee reductions on June 25, 2026.
The fund’s sponsor fee was lowered from 0.35% to 0.19%. At the same time, the staking fee was reduced from 23% of gross staking rewards to just 7%.
As a result, a greater percentage of the income produced through Solana staking can potentially be passed on to GSOL shareholders.
The lower fees could also make the fund more competitive as institutional and retail demand for yield-generating cryptocurrency products continues to grow.
Grayscale Staking ETFs Become Income-Producing Products
The proposed quarterly distribution model would represent an important change in how Grayscale’s staking ETFs operate.
Instead of offering only exposure to ETH or SOL price movements, the funds would also provide shareholders with direct cash income from staking activities.
This structure makes the products more comparable to dividend ETFs. Investors would receive clearly visible payments rather than seeing staking rewards reflected only through gradual increases in share value.
Income-focused investors may prefer this level of transparency. Competing crypto ETFs that reinvest staking rewards into their net asset values may not provide the same predictable cash flow.
Stronger demand for these funds could also increase institutional buying of Ethereum and Solana. Authorized participants may need to purchase additional ETH or SOL as new money enters the ETFs.
Grayscale Expands Its Crypto Staking Strategy
The amendments are part of Grayscale’s broader effort to develop cryptocurrency investment products that combine price exposure with staking income.
The company has also explored staking features for other proposed funds, including a HYPE ETF mentioned in an updated registration filing.
This suggests that Grayscale may view staking rewards as an important way to differentiate its products from conventional spot cryptocurrency ETFs.
However, investors should understand that staking distributions will vary. Payment amounts may be affected by network conditions, token prices and the performance of the validators used by the funds.
The value of ETH or SOL when staking rewards are converted into dollars could also influence the final cash distribution.
When Could the First Cash Distributions Begin?
The amendments are expected to become effective around August 7, 2026. This follows the required 20-day shareholder notification period triggered by the July 17 SEC filing.
Once the changes take effect, qualifying investors in ETHE and GSOL could begin receiving staking rewards through periodic cash payments rather than relying solely on NAV appreciation.
Investors should also consider the potential tax consequences of receiving staking income. These payments may be treated as ordinary income, although the exact tax treatment can depend on individual circumstances and local regulations.
Anyone considering an investment should consult a qualified tax or financial professional. Investors should also note that these products are not registered under the Investment Company Act of 1940.
