Grayscale signed a new trust agreement on August 6 that makes staking the default for nearly all Ether in its Ethereum Staking Mini ETF (ETH), moving to monthly cash payouts for shareholders. The change comes four days before an IRS deadline for adjusting staking arrangements without triggering fund-level taxes.
Why the IRS deadline mattered
The IRS requires quarterly distributions for tax-exempt staking, and the August 10 deadline was the last chance for funds to adjust their staking setups without facing tax consequences. Grayscale's new agreement, signed on August 6, brings the fund into compliance. The timing is tight—just four days of runway—but the move clears the path for the fund to keep staking without a tax hit.
The new staking setup
As of August 6, the fund had staked 80.8% of its 839,556 ETH, leaving roughly 161,000 ETH idle as a buffer for redemptions, fees, and operations. The trust agreement commits to staking all Ether at all times, except for carve-outs like fees, redemptions, and network emergencies. That buffer is intentional—it gives the fund room to handle day-to-day operational needs without touching the staked portion.
What the fund has earned
Grayscale's Mini ETF has pulled in $27.3 million in net staking rewards since October 2025, when it became the first US issuer to stake in spot crypto funds. Net rewards currently run at 2.61% per year after fees. That's a meaningful yield for a fund that previously left most of its Ether idle.
Fee pressure from rivals
Morgan Stanley launched Ethereum and Solana funds charging 0.14%, undercutting Grayscale's 0.15% fee. The gap is slim, but it's enough to matter in a market where institutions are increasingly rotating toward staked products. Intesa Sanpaolo, for one, has shifted toward staked Ethereum offerings this year. Grayscale's move to default staking looks like a direct response to that competition.
