Grayscale is planning to hand out cash from staking rewards to investors in its Ethereum and Solana ETFs. The plan, disclosed in SEC filings on July 17, calls for distributions at least quarterly, starting around August 7.
How the payouts will work
The Grayscale Ethereum Staking ETF and Grayscale Solana Staking ETF will convert staking rewards — earned in ETH or SOL — into cash at least quarterly. After covering expenses, the cash gets distributed to shareholders. Grayscale says it may pay out more often than quarterly, but actual amounts depend on the rewards the trust receives.
This isn't the first time Grayscale has done this. The firm's Ethereum Trust (ETHE) made a similar cash distribution on January 6, paying about $0.083 per share, or $9.39 million total. That payout covered staking rewards earned between October 6 and December 31, 2025.
Tax treatment for holders
The structure follows IRS Revenue Procedure 2025-31, which lets compliant trusts distribute staking rewards at least quarterly — either in kind or as cash. But there's a catch for U.S. holders. Under grantor-trust rules, you have to recognize your pro rata share of staking rewards as taxable income when the trust receives them, not when you get the cash.
On top of that, selling ETH or SOL to fund the cash distributions could trigger pro rata capital gains or losses for holders. So the tax bill might come before the cash hits your account.
Why the cash structure matters
The quarterly cash payout setup lets investors directly compare net cash returns from Ethereum and Solana staking ETFs. That's a big deal for anyone weighing which staking asset to hold. Instead of tracking illiquid staking credits, you get a clear dollar figure each quarter.
The first distribution around August 7 will be a real-world test of how smoothly Grayscale can convert staking rewards into cash and pass them along. Investors will be watching the per-share amount and the timing closely.
