Grayscale Announces First Staking Reward Distribution for U.S. Listed Ethereum ETF

Grayscale Announces Staking Reward Distribution

Grayscale has announced a distribution of staking rewards for its Ethereum ETF, marking the first time a U.S.-listed Exchange-Traded Product (ETP) has scheduled a payment tied to on-chain staking activities. Shareholders of the Grayscale Ethereum Trust (ETHE) will receive approximately $0.08 per share from the revenues generated through the sale of staking rewards, with a payment scheduled for Tuesday, based on holdings recorded at Monday's market close.

Staking for Grayscale's Ethereum products was activated on October 6, with the staking conducted through institutional custodians and third-party validator providers. This move makes ETHE and the Grayscale Ethereum Mini Trust ETF (ETH) the first U.S.-listed spot ETPs that benefit from Ether staking. Staking is the process by which cryptocurrencies are locked on a proof-of-stake blockchain to assist in validating transactions and securing the network, in exchange for periodic rewards.

In the case of the Grayscale Ethereum Trust, rewards are converted to cash and distributed to investors in dollars, rather than being paid in Ether. Grayscale funds operate outside the Investment Company Act of 1940, the main legislation governing ETFs in the U.S., a structure that allows staking but offers different regulatory protections compared to traditional U.S. ETFs.

Founded in 2013, Grayscale Investments is a digital asset manager sponsoring cryptocurrency investment products, with approximately $31 billion in assets under management, according to the company. The ETF rose by about 2% in the first hours of trading, according to Yahoo Finance data.

While Grayscale is currently the only U.S. fund issuing payments related to Ether staking, several large asset managers are awaiting approval from the U.S. Securities and Exchange Commission for their spot Ether ETFs. In March, Cboe BZX submitted a regulatory amendment proposal to U.S. regulators to allow staking integration in the Fidelity Ethereum Fund.