Grayscale amended trust agreements on Aug. 6 for its Ethereum, Solana and Avalanche staking ETFs, setting a binding quarterly floor for converting staking rewards to cash and paying shareholders. The three funds plan to keep paying monthly, but only the earned reward tokens are covered — not the funds' underlying ETH, SOL or AVAX holdings.
Grayscale has set a mandatory minimum cadence for turning staking rewards from three crypto exchange-traded products into cash, then paying the net proceeds to shareholders. The trust amendments took effect Aug. 6 for the Grayscale Ethereum Staking ETF (ETHE), Grayscale Solana Staking ETF (GSOL) and Grayscale Avalanche Staking ETF (GAVA).
Monthly payouts, quarterly floor
The amendments require each fund to reduce its "Staking Consideration" to cash no less often than quarterly, then distribute the net proceeds promptly after fees and trust expenses. The three trusts currently intend to make distributions monthly, according to Form 8-K filings submitted Aug. 7, but the binding floor is quarterly. This does not create scheduled liquidation of the trusts' principal ETH, SOL or AVAX holdings — the rule applies only to staking consideration the funds earn, and other disclosures still permit token sales for redemptions, fees and expenses.
How much sits staked
As of June 30, ETHE reported $1.22 billion in total assets and $999.96 million in staked ETH, roughly 81.7% of its assets. GSOL reported $101.16 million in assets and $101.05 million of staked SOL, about 99.9%. GAVA reported $4.27 million in assets and $3.45 million of staked AVAX, about 80.9%.
Fees cut into the reward
ETHE charges a 2.5% annual sponsor fee, and its sponsor staking fee plus validator fees together accounted for 23% of gross rewards as of June 30. GAVA disclosed a 0.35% annual sponsor fee and the same 23% aggregate reward deduction. GSOL disclosed a 0.19% annual sponsor fee and a 7% aggregate staking-related deduction covering sponsor and validator fees. The annual sponsor fees and the reward deductions use different bases and should not be treated as additive.
Tax treatment still unsettled
Assuming grantor-trust treatment applies, a US holder is generally treated as receiving a pro rata share of staking income when the trust earns it, and a later sale of reward tokens to fund a cash distribution can allocate a pro rata capital gain or loss to the holder. Receiving the cash itself should not be an additional taxable event under that treatment. The disclosures caution that the grantor-trust position is not guaranteed, and they flag potential unrelated business taxable income for some tax-exempt holders plus unresolved withholding questions for non-US investors.
ETHE offers a precedent without a forecast: it paid about $9.4 million, or $0.083178 per share, on Jan. 6 after selling rewards earned from Oct. 6 through Dec. 31, 2025. Different asset levels, staking participation, fees and token prices make it unsafe to extrapolate that payment across the three funds.
Source: CryptoSlate
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