Woofun AI reports that Grayscale is restructuring its yield distribution model for the Grayscale Ethereum Staking ETF (ETHE) and the Grayscale Solana Staking ETF (GSOL) by converting Ether (ETH) and Solana (SOL) staking rewards into regular cash payouts. This strategic pivot aims to provide shareholders with recurring liquidity from underlying asset yields without requiring direct crypto custody.

The operational mechanics were detailed in Form 8-K filings submitted to the US Securities and Exchange Commission (SEC), which outline planned amendments to the trust agreements effective around Aug. 7. Under the new framework, each trust is mandated to convert staking rewards into cash no less frequently than quarterly and distribute the net proceeds to shareholders. This structure eliminates the need for investors to manage validators or hold crypto directly, thereby streamlining access to staking returns through traditional broker-held products.

Grayscale enabled staking for its ETH and SOL products on Oct. 6, 2025, marking the first time a US crypto fund issuer integrated staking into spot crypto ETPs. The asset manager executed its inaugural ETHE staking distribution on Jan. 5, paying shareholders approximately $0.08 per share from the sale of rewards. As of the latest reporting, ETHE held $1.22 billion in net assets, while GSOL managed $101.13 million.

Yield performance metrics highlight the disparity between the two assets, with the Ethereum fund’s gross staking rewards standing at 2.67% and the Solana fund’s at 6.10% as of July 17.

Woofun AI notes that these distributions are designed to maintain compliance with Internal Revenue Service (IRS) rules, allowing the funds to earn staking rewards without jeopardizing their current tax treatment. Shareholders are provided with a 20-day notice period before the amendments take effect, ensuring transparency regarding the shift in distribution methodology.

The proposed structure allows trusts to deduct expenses not assumed by the sponsor prior to distribution, which may include portions of staking rewards paid to the sponsor for facilitating staking activities. Consequently, payout amounts are not fixed or guaranteed, as they will fluctuate based on the volume of assets staked and prevailing network conditions. This variable approach underscores the inherent unpredictability of staking yields while aligning the funds with regulatory expectations for traditional investment vehicles.