Grayscale Staking Update Locks In Monthly Rewards Ahead Of IRS Deadline

The Grayscale staking strategy just became a lot more shareholder-friendly. Days before an important IRS deadline expired, the asset manager updated its trust agreement to make staking the default for nearly every eligible asset held in the fund while paving the way for regular cash distributions.

Timing mattered here. The revised trust agreement was signed on August 6, just four days before the August 10 IRS deadline for funds seeking the new tax treatment.

IRS Deadline Changed The Playing Field

The latest update follows IRS rules published last November that allow crypto funds to stake assets without triggering fund-level tax.

There’s one catch, though. Staking rewards must be distributed to shareholders at least every quarter.

Grayscale’s revised agreement goes a step further. Instead of sticking to quarterly distributions, staking rewards will be converted into cash with monthly payouts planned. The rewrite also makes staking the standard approach for nearly every eligible cryptocurrency held within the fund.

Staking Rewards Continue Building

The move builds on an initiative that began much earlier. Grayscale became the first U.S. issuer to activate staking within its spot crypto funds in October 2025. Since then, the firm’s Mini ETF has generated $27.3 million in net staking rewards, according to Grayscale data.

Net staking rewards currently stand at 2.61% annually after fees. As of August 6, the fund had staked 80.8% of its 839,556 ETH holdings, while approximately 161,000 ETH remained unstaked to support redemptions, operational requirements, and fees.

Competition Keeps Fee Pressure Rising

Even as Grayscale expands its staking framework, competition isn’t standing still. Morgan Stanley has launched Ethereum and Solana funds charging 0.14%, narrowly undercutting Grayscale’s 0.15% fee.

That means staking rewards alone may not determine where investors allocate capital. Fees, yield, operational flexibility, and distribution structure are all becoming part of the competitive equation.

Still, the latest Grayscale staking update ensures the firm remains aligned with the IRS framework while offering shareholders recurring cash payouts from staking rewards before the regulatory window closed.