Grayscale Ethereum Staking Mini ETF to Distribute Cash Rewards from Staking Nearly All Holdings

Grayscale has amended the trust agreement for its $1.6 billion Ethereum Staking Mini ETF to make staking the default for nearly all of its 839,556 Ether holdings, reducing its 161,000 idle Ether buffer. Signed on August 6, 2026, ahead of an August 10 IRS deadline, the update requires the fund to convert staking rewards into cash and distribute them to shareholders at least quarterly, with monthly payouts planned. The fund has earned $27.3 million in net rewards since October 2025.

Quarterly cash reward distributions

• ▪The Grayscale Ethereum Trust executed the first-ever US staking payout on January 6, 2026, distributing approximately $9.4 million in staking rewards to shareholders.
• ▪Grayscale currently intends to distribute the net cash proceeds of staking rewards from the Grayscale Ethereum Staking Mini ETF to shareholders on a monthly basis, but no less than quarterly.
• ▪Grayscale plans to convert Ethereum staking rewards into cash and distribute them to shareholders of the Grayscale Ethereum Staking Mini ETF at least quarterly.

IRS tax compliance deadline

• ▪Internal Revenue Service rules published in November 2025 allow cryptocurrency funds to stake assets without triggering fund-level tax, provided rewards are distributed to shareholders at least quarterly.
• ▪Grayscale executed its updated trust agreement on August 6, 2026, four days before an Internal Revenue Service tax compliance deadline on August 10, 2026.
• ▪Grayscale's Securities and Exchange Commission filing notes that the Internal Revenue Service has not provided complete certainty regarding staking activities within grantor trusts.

ETF staking percentage increase

• ▪The new trust agreement for the Grayscale Ethereum Staking Mini ETF aims to reduce its idle buffer of approximately 161,000 Ether by making staking the default for nearly all holdings.
• ▪As of early August 2026, the Grayscale Ethereum Staking Mini ETF held 839,556 Ether, with 80.8% of those holdings actively staked.
• ▪The Grayscale Ethereum Staking Mini ETF has earned $27.3 million in net rewards since October 2025, with net staking rewards running at 2.61% annually after fees.

Trust agreement amendments

• ▪Grayscale filed a prospectus supplement pursuant to Rule 424(b)(3) with the Securities and Exchange Commission on August 7, 2026, to update public disclosures regarding the new trust agreement.
• ▪On August 6, 2026, Grayscale Investments Sponsors, LLC and CSC Delaware Trust Company entered into the Third Amended and Restated Declaration of Trust and Trust Agreement.

Staking fee structure

• ▪The Third Amended and Restated Trust Agreement for the Grayscale Ethereum Staking Mini ETF introduces a staking fee, allowing a portion of staking rewards to be deducted before distributions are made.
• ▪The Grayscale Ethereum Staking Mini ETF launched on July 23, 2024, with a management fee of 0.15%.