Grayscale GSOL Solana Staking ETF to Pay Quarterly Cash Distributions Starting

Grayscale filed a Form 424B3 prospectus supplement and an 8-K material event report with the SEC on July 17, 2026, amending the Grayscale Solana Staking ETF (ticker: GSOL, NYSE Arca) trust structure to deliver quarterly cash distributions of staking rewards to shareholders. The amendment takes effect on or around August 7, 2026.

Previously, staking income compounded inside the fund and reflected in the per-share net asset value. Under the amended trust, GSOL will convert staking rewards to cash no less than quarterly and distribute the net proceeds after sponsor fees and expenses directly to shareholders. Exact amounts depend on actual staking rewards received during each period, which the filing says "cannot be predicted with certainty."

How GSOL's Quarterly Cash Distribution Mechanism Works

The fund stakes 100% of its SOL holdings. As of July 16, 2026, GSOL earns approximately 6.10% in gross staking rewards annually. Under the new framework, those rewards are periodically liquidated to USD, the sponsor's staking fee and fund expenses are subtracted, and the net cash proceeds are distributed to shareholders.

The Form 424B3 prospectus supplement states the trust will "reduce the Staking Consideration held by the Trust to cash no less often than quarterly and to promptly distribute the cash proceeds." Distributions can occur more frequently at Grayscale's discretion, but the trust commits only to the quarterly floor.

Fee Cuts Already in Effect Since June

Grayscale reduced both fees effective June 25, 2026, ahead of this distribution amendment. Compass covered those cuts when they were filed.

At a 7% staking fee, shareholders retain a much larger share of the gross yield than they did under the prior 23% arrangement. Combined with the quarterly cash payout structure, GSOL now passes more staking income directly to investors rather than compounding it inside the fund.

IRS Compliance and Grantor Trust Tax Structure

The 8-K filing states the amendment was structured to comply with IRS Revenue Procedure 2025-31, which allows grantor trusts to maintain their tax classification while distributing staking proceeds. That classification matters for shareholders: if GSOL lost grantor trust status, distributions could become subject to a 21% corporate-level tax and 30% withholding on certain payments.

A 20-day shareholder notice was provided before the August 7 effective date.

GSOL vs. SSK, and the Ethereum Staking Precedent

The competing REX-Osprey SOL + Staking ETF (ticker: SSK) distributes staking rewards monthly, a faster cadence than GSOL's quarterly minimum. This gap matters for investors who prioritize regular income over compounded NAV growth.

Grayscale had already applied the same distribution model to its Ethereum Staking ETF, which began cash distributions in January 2026. The Solana fund follows that template roughly six months later.

GSOL launched as a private placement in November 2021 and moved to NYSE Arca on October 29, 2025, opening the fund to standard brokerage accounts. It held approximately $97 million in total assets as of mid-July 2026. The fund is not registered under the Investment Company Act of 1940 and its custodian is Coinbase Custody Trust Company, LLC.