Grayscale submitted filings with the SEC on July 17 to amend its Ethereum and Solana staking ETFs — ETHE and GSOL — so that staking rewards get paid out as direct cash to holders. The change marks a departure from the current model, where those rewards only boosted the fund's net asset value. The firm also cut fees on both products, though it didn't disclose the new rates.
Cash distributions replace NAV-only model
Under the existing structure, staking rewards accumulated inside the ETF and lifted the share price over time. Investors who wanted to realize that value had to sell shares. The proposed amendment flips that: rewards will be distributed as cash, giving holders a regular income stream without touching their position. The shift could make the ETFs more attractive to income-focused investors, especially in a rate environment where yield is hard to come by.
Fee reductions across the board
Grayscale didn't say exactly how much it cut fees, but the move comes as competition in the crypto ETF space heats up. Rivals like Bitwise and VanEck have been undercutting on expense ratios. Lower fees, combined with cash payouts, could help ETHE and GSOL retain assets that might otherwise flow to cheaper competitors. The timing isn't accidental — the SEC has been slow to approve staking features in ETFs, and Grayscale is betting that a cleaner payout structure will pass muster.
Solana's 6.1% yield in focus
The Solana staking yield currently sits at 6.1%, according to the filing. That's a decent return in a market where many crypto yields have compressed. For GSOL holders, the cash distribution would turn that yield into a quarterly or monthly check, depending on how Grayscale structures the payouts. Ethereum's staking yield is lower — typically around 3-4% — but the principle is the same. The cash model removes the friction of having to sell shares to access staking gains.
The SEC will now review the proposed amendments. Grayscale hasn't given a timeline for when the changes might take effect, but the clock starts with the July 17 filing. If approved, the cash distributions would begin in a subsequent quarter. Holders will be watching for the SEC's response — and for the final fee numbers.
