Grayscale to Initiate Quarterly Cash Payouts for ETH and SOL Staking

Grayscale to Initiate Quarterly Cash Payouts for ETH and SOL Staking

Grayscale has announced its plans to regularly distribute cash payouts from staking rewards earned through its exchange-traded funds (ETFs) focused on Ethereum (ETH) and Solana (SOL). These quarterly distributions, which are set to commence on or around August 7, 2026, will be made from the rewards obtained from staking activities.

Details of the Distribution Plan

The proposed changes were detailed in filings submitted to regulators on July 17, 2026. Under the amendments, the Grayscale Ethereum Staking ETF (ETHE) and the Grayscale Solana Staking ETF (GSOL) will sell the ETH and SOL earned from staking and convert it into cash, which will then be distributed to shareholders. These cash payouts will occur at least quarterly, subject to variations depending on staking rewards, operating expenses, management fees, and tax considerations.

Previous Payouts and Stakeholder Considerations

Grayscale previously distributed approximately $9.39 million from ETHE’s staking rewards for the latter part of 2025, averaging about $0.083178 per share. This marked a significant move as ETHE became the first U.S.-listed spot crypto product to pass Ethereum staking proceeds directly to investors in cash rather than in cryptocurrency.

The new distribution model aims to provide investors with greater transparency regarding the net cash generated from staking activities, allowing for easier comparison between the two funds based on the distributions and the costs associated with fund management.

Implications of the Amendments

Moreover, the IRS Revenue Procedure 2025-31 stipulates that compliant trusts may distribute net staking rewards in cash or crypto, provided distributions happen no less frequently than quarterly. Grayscale has chosen to adopt the cash distribution route for both ETF products, meaning that both ETHE and GSOL will sell the rewards before passing the proceeds to shareholders.

Grayscale’s decision also reflects the growing institutional interest in regulated staking opportunities. Other fund managers, including BlackRock, are moving in the same direction, offering staking options with similar payout structures.

Looking Ahead

As Grayscale works to finalize these amendments, the details surrounding the first payout amounts and dates remain uncertain, primarily hinging on the outcome of staking rewards and the overall performance of the networks involved. Investors are advised to consult with their tax advisors regarding the potential implications of receiving cash distributions.