Key Takeaways
- Grayscale is the first U.S. issuer to launch staking on listed spot crypto ETPs with its Ethereum and Solana investment products.
- The update includes ETHE of $4.82 billion in assets, Ethereum Mini Trust of $3.31 billion and GSOL of $122.5 million, albeit OTC-traded.
- On Monday, the percentage of staking rewards to the sponsor, custodian and the validator partners will be 23%, and the rest will belong to the trust, which will retain 77%.
Grayscale Investments has introduced staking functionality to its Ethereum and Solana investment products as a first among listed spot crypto exchange-traded products designed to operate in the United States. The relocation will allow the investors to get on-chain with their funds at Grayscale without needing to purchase and store crypto resources directly.
Grayscale Adds Staking Feature to Ethereum, Solana ETPs
The new feature is offered to three of the company’s products, namely the Grayscale Ethereum Trust ETF (ETHE), the Ethereum Mini Trust ETF, and the Grayscale Solana Trust (GSOL). This will be the first time these products are exposed to the market with Ether and Solana, but will also be able to generate staking rewards based on network underlying networks.
The ETHE of Grayscale has net assets under management (AUM) of around $4.82 billion, and the Ethereum Mini Trust ETF has around $3.31 billion. The GSOL product of Solana has $122.5 million in AUM. All three funds are still available to investors, and GSOL is currently trading over-the-counter until it receives the necessary permission to become a listed Solana ETP, where it will be possible to stake funds.
The company states that staking will be done passively by institutional-grade custodians and providers of validators. The company indicated that the strategy will provide network integrity and comply with the investment goals of every trust.
Staking is a fundamental protocol of proof-of-stake blockchains, including Ethereum and Solana, during which participants pledge tokens to authenticate network transactions and receive rewards in native cryptocurrencies. With this mechanism, Grayscale will enable investors to enjoy staking yields indirectly by investing in its investment vehicles.
Coinbase Enters The Scene With A Bang
The staking launch is the latest update to the operation agreements of Grayscale and Coinbase. Grayscale Investments Sponsors, LLC has entered into a new prime broker relationship with Coinbase, Inc., on October 3. Coinbase Custody Trust Company, LLC and Coinbase Credit, Inc. are involved in the deal, which replaces a prior agreement that was signed on May 23, 2024. Under the new terms, Coinbase will retain the responsibility of Ether reserves in the trust and offer brokerage services.
Moreover, Grayscale and Coinbase signed a staking addendum, which defined how the trust’s ETH would be staked. The contract permits staking through the custodian or third-party validator units, which might be affiliates of Coinbase or other institutional staking service providers.
According to the latest regulatory filing, the profit of the staking business will be shared between the participating parties. The custodian and staking provider will be compensated with a percentage of the gross staking rewards as part of the services that they provide, and an extra fee will be given to Grayscale as the person sponsoring the fund. The sponsor can pay in Ether or in another consideration and it was calculated based on a percentage of the returns that are credited to the trust in terms of stake.
The sponsor, custodian, and validator partner are currently being allocated the total 23% of the total staking rewards earned. Meanwhile, the remaining 77% of the total staking rewards are held in the trust as the benefit of the investors.
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