Grayscale Ethereum ETF to stake 161,000 idle ETH after trust rewrite

Grayscale's $1.6 billion Ethereum Staking Mini ETF will stake nearly all of its 161,000 idle ETH under a trust agreement signed Aug. 6.

The Third Amended and Restated Declaration of Trust, filed with the SEC, requires the trust to convert staking rewards to cash at least quarterly and promptly distribute net proceeds to shareholders, with monthly payouts planned. The agreement was signed with trustee CSC Delaware Trust Company.

The rewrite landed four days before an IRS deadline. Rules published last November let crypto funds stake without triggering fund-level tax, provided rewards flow to shareholders at least quarterly. Grayscale became the first US issuer to switch on staking in spot crypto funds in October 2025, and the Mini ETF has earned $27.3 million in net rewards since, with net staking yield at 2.61 percent a year after fees. As of Aug. 6, the fund had staked 80.8 percent of its 839,556 ETH.

Whether payouts grow now hinges on that idle buffer. If the staked share climbs from 80.8 percent toward full deployment, distributable rewards should rise with it. Upcoming disclosures will show how fast that happens.

Staking becomes the default, not the target

The agreement states the trust shall "engage in Staking with respect to all of the Trust's Ether at all times," except for carve-outs covering fees, redemptions, and network emergencies. Grayscale signed the rewrite Aug. 6, four days before the IRS deadline of Aug. 10 to make such changes.

Rivals compete on cost and yield

Morgan Stanley launched Ethereum and Solana funds charging 0.14 percent, undercutting Grayscale's 0.15 percent. Institutions such as Intesa Sanpaolo have rotated toward staked Ethereum products this year. Ethereum trades near $1,915, up 0.4 percent over 24 hours, so staking yield remains a modest but steady sweetener on top of price exposure.

The shift could set a precedent for other spot crypto ETFs to enable staking features, potentially lifting ETH staking participation and tightening available supply. For income-focused investors, the ETF's move from no dividend to regular cash distributions marks a notable change in how crypto funds return value.

This article is for informational purposes only and does not constitute investment advice.