Grayscale made staking the default and set up monthly cash payouts from $27.3M in net rewards, just before the Aug. 10 IRS deadline for crypto funds.
Grayscale updated its trust agreement on Aug. 6, four days before the Aug. 10 IRS deadline for crypto funds seeking favorable tax treatment. The revision makes staking the default for nearly every eligible asset in the fund and sets up monthly cash payouts from staking rewards.
The IRS rules published last November allow crypto funds to stake assets without triggering a fund-level tax, provided rewards are distributed to shareholders at least quarterly. Grayscale’s new agreement goes further than the minimum. Staking rewards will be converted into cash and paid out monthly, not just quarterly.
The move builds on an initiative that started in October 2025, when Grayscale became the first U.S. issuer to activate staking inside a spot crypto fund. Since then, the firm’s Mini ETF has generated $27.3 million in net staking rewards, Grayscale said. Net staking rewards currently run at 2.61% annually after fees.
As of Aug. 6, the fund had staked 80.8% of its 839,556 Ethereum (ETH) holdings. About 161,000 ETH remained unstaked to cover redemptions, operational needs, and fees, Grayscale said.
The timing of the update matters. The Aug. 10 IRS deadline was the last day for funds to adopt the new staking framework and qualify for the tax treatment. Grayscale’s Aug. 6 signing left a four-day cushion.
Competition is also heating up. Morgan Stanley launched Ethereum and Solana funds charging 0.14%, narrowly undercutting Grayscale’s 0.15% fee. That means staking yield alone won’t decide where investors park capital. Fee differentials, payout frequency, and operational flexibility all factor in.
Grayscale’s revised agreement keeps the fund aligned with the IRS framework while giving shareholders regular cash distributions from staking rewards before the regulatory window closed.
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