Grayscale turned more than $1.1 billion of staked crypto into a recurring reward-sale machine for ETF holders
Grayscale amended ETHE, GSOL, and GAVA so each trust must convert staking rewards (“Staking Consideration”) into cash and distribute net proceeds to shareholders at least quarterly, though current plans are monthly. The rule applies only to staking rewards, not to principal ETH, SOL, or AVAX holdings. It creates recurring sell flow for reward tokens, but the amount sold will depend on rewards earned, staking levels, protocol reward rates, token prices, and fees. As of June 30, ETHE had $1.22 billion in assets with about 81.7% staked, GSOL had $101.16 million with about 99.9% staked, and GAVA had $4.27 million with about 80.9% staked. Fee structures differ across the products, and sponsor fees are separate from staking-related reward deductions. Tax disclosures indicate staking income and any later trust sale of reward tokens may each have tax consequences, while receipt of cash itself generally would not be an extra taxable event under grantor-trust treatment.
