On July 17, Grayscale announced it will amend the terms of two staking products, Grayscale Ethereum Staking ETF (ETHE) and Grayscale Solana Staking ETF (GSOL), to convert staking rewards into quarterly cash distributions, with an expected effective date around August 7, 2026. This move was submitted to the SEC via corresponding 8-K filings, indicating that Grayscale is updating the structure of its staking products to better align with the new IRS tax framework.
Grayscale Moves on Staking Payouts
Grayscale has just adjusted the payout structure of its two core staking products. They are shifting staking rewards to a clearer distribution mechanism for ETHE and GSOL. According to SEC filings, staking rewards will be funneled into quarterly cash distributions rather than simply accumulating in the fund’s NAV.
Grayscale stated that this is a change in the trust agreement, representing a structural adjustment at the product level. The company also provided 20 days’ advance notice to shareholders before the amendment is expected to take effect. From a market perspective, this move makes the staking mechanisms of ETHE and GSOL easier for investors to understand, as the yield stream is expressed in cash rather than remaining solely tied to net asset performance.
ETHE, GSOL Update Terms
Both ETHE and GSOL are being modified under the same framework: staking rewards will be converted into cash distributions at least quarterly, after deducting related expenses. Payout amounts will vary based on the actual staking rewards received in each period, so distribution figures are not fixed in advance.
For ETHE, Grayscale stated it will amend the declaration of trust to begin cash distributions from net staking proceeds. GSOL is taking a similar approach, aiming to place staking rewards into a clearer distribution rhythm rather than letting them accumulate in the fund.
Grayscale also noted it will file a prospectus supplement pursuant to Rule 424(b)(3) after the amendment takes effect to update official details for investors.
Tax Rules Drive the Shift
IRS Revenue Procedure 2025-31, published in Internal Revenue Bulletin 2025-48, provides a safe harbor for trusts holding digital assets and participating in staking while seeking to maintain investment trust or grantor trust status.
For Grayscale, the key requirement is that staking rewards, after deducting trust expenses, must be distributed periodically, at least quarterly. In other words, to stake within this tax framework, the trust cannot allow yield to sit inside the fund for too long.
The IRS also imposed additional conditions regarding liquidity, custody, and the holding of assets in proof-of-stake networks. This is why Grayscale described amending the trust agreement as necessary to align with the new tax framework.
The Numbers That Matter
ETHE’s latest quarterly filing shows that the fund had net assets of approximately $1.785 billion as of March 31, 2026, with 104.7 million shares outstanding and a Principal Market NAV per Share of $17.05. In the first quarter, the fund recorded staking reward income of $10.522 million. During the same period, ETHE actually paid out cash from staking rewards totaling $14.389 million, equivalent to $0.129898 per share, across three distribution rounds on January 6, February 4, and March 4, 2026.
GSOL net asset. Source: SEC
For GSOL, the Q1 2026 filing shows the fund had $105.118 million in net assets, 17.114 million shares outstanding, and a Principal Market NAV per Share of $6.14. The fund’s portfolio was almost entirely in SOL, with 1.272 million SOL held and 100% of net assets allocated to Solana as of March 31, 2026. The principal market price of SOL at that time was $82.60 per token. In Q1, GSOL recorded staking reward income of $2.202 million. These figures indicate that Solana’s staking scale is smaller than Ethereum’s in absolute terms, but still sufficient to support a quarterly cash distribution mechanism if Grayscale continues to expand this model.
Investor Implications
For investors, this change makes ETHE and GSOL easier to track. Quarterly cash distributions make ETHE and GSOL easier to track, as yield is paid out in cash rather than merely reflected indirectly in the fund’s NAV. For institutional and retail investors who prefer regular cash flow, this structure makes the product easier to read.
On the flip side, staking rewards will no longer be fully retained to accumulate within the fund. Distribution levels will depend on actual staking consideration received, trust expenses, and the volatility of each network, meaning Grayscale cannot set payout rates in advance.
The next date to watch is around August 7, 2026, when the amendment is expected to take effect and new prospectus supplements may be published. If it stays on schedule, ETHE and GSOL will have a clearer payout framework for investors to follow.
