Gray starts paying regular ETH and SOL pledge rewards

Grayscale is adopting a model closer to "traditional revenue" for its pledge-based cryptocurrency exchange traded products (ETP). In a recent Form 8-K filing with the Securities and Exchange Commission, the asset management company said it plans to amend the trust agreements behind its Grayscale Ethereum Staking ETF (ETHE) and Grayscale Solana Staking ETF (GSOL) to convert pledge awards into cash on a set cycle and distribute them to shareholders.

Grayscale said the proposed changes will take effect around August 7. According to the revisions, each trust will convert pledge rewards into cash at least quarterly and distribute net income to investors. The company also stressed that since the allocation amount will depend on pledge performance and trust fees deducted before payment, it is impossible to predict the dividend level in advance.

Core Points

Grayscale plans to revise the trust agreements between ETHE and GSOL around August 7 to achieve quarterly cash distribution from pledge rewards. Since the allocation amount depends on the pledge rewards received in each cycle and the costs deducted by the trust, it is expected to change over time. Cash dividends are designed to allow investors to earn income from the shares of ETP held by brokers without directly managing pledge operations. The documents link the change to maintaining the current tax treatment of the fund under IRS rules while still earning pledge rewards. ETHE has begun to make pledge distribution, and the first dividend was recorded on January 5, which was approximately US$0.08 per share.

From pledge proceeds to cash proceeds for ETP holders

Grayscale's filing outlines steps to integrate pledge proceeds into the operations of its ETP structure. The company's goal is not to require investors to hold cryptocurrency outside the fund or participate in pledge operations themselves, but to convert the return generated by the pledge into cash distributions paid through the ETP structure. In a filing with the SEC, Grayscale said it intended to revise the trust agreement governing its Solana and Ethereum pledge products. The amendments will require trusts to convert pledge rewards into cash at least quarterly and distribute net income to investors after deducting fees and other trust-level factors. For investors, the actual impact is direct: if approved and implemented as described, holders can receive pledge proceeds in a more familiar form-cash dividends-while holding a regulated share of ETP through their brokerage accounts.

SEC document points to tax structure considerations

Grayscale said the revisions aim to bring funds into compliance with IRS guidance, allowing these ETP tools to earn pledge rewards while maintaining existing tax treatment. According to the document, the trust mechanism will also consider deducting fees related to sponsors and trusts before distributing income. The company noted that it does not expect the changes to cause "significant" harm to shareholders and plans to provide investors with more updates after the changes take effect, including a description of how regular cash dividends will work. At the same time, Grayscale made it clear that there is no fixed allocation amount. The document pointed out that due to changes in the number of pledged assets in each cycle and changes in network conditions that affect the amount of pledged rewards generated in each cycle, the dividend results may vary from cycle to cycle.

How much revenue has been generated so far

Grayscale's pledge allocation path has been partially activated. According to the company's SEC filings and related disclosures, Grayscale enabled pledge functionality for its ETH and SOL products on October 6, 2025-these documents described this as the first time a U.S. cryptocurrency fund issuer has increased pledge in spot cryptocurrency ETPs. Grayscale also reported that ETHE made its first pledge distribution on January 5, paying shareholders approximately $0.08 per share through a sale award. In addition, based on market information, ETHE's net assets at the end of the week were US$1.22 billion, while GSOL was US$101.13 million. Grayscale's funds page provides an overview of total pledge returns: As of July 17, ETHE's total pledge return was 2.67%, while GSOL's pledge total yield was 6.10%. While these data help understand the current state of the product, the SEC filing emphasizes that total pledge yields are not the same as predictable cash distribution. The net dividend will depend on trust fees and the volatility of rewards from cycle to cycle.

What happens next-and what investors should focus on

If Grayscale's proposed trust amendment is implemented around August 7, shareholders should expect the operation process of pledge rewards to be formalized into a regular cash distribution process that is at least quarterly. The company also said it would update the fund after the changes take effect to provide more details about the allocation process. For investors, the main focus is the reliability of the ETP in converting pledge rewards into cash and the consistency between actual net allocations and expectations based on total yields-especially given fluctuations in network conditions and pledge results. Grayscale's filing makes it clear that quarterly dividends will not be static, so investors may need to focus on actual distribution announcements rather than assuming stable returns. Beyond ETHE and GSOL, in a broader sense, Grayscale is pushing pledges in a direction similar to income-based ETP products-which may make pledge proceeds more attractive to traditional brokerage-based investors. The next test will be whether the execution of quarterly cash allotments remains consistent and how investors will react as product allotments grow.