Grayscale has revised the trust agreement for its Ethereum Staking Mini ETF, a move that would make staking the default for almost all of the fund’s Ether holdings and reduce a large idle balance over time. The change affects a fund with about $1.6 billion in assets and comes just days before an August 10 IRS deadline tied to how staking rewards are handled for tax purposes.

As of August 6, the ETF held 839,556 ETH, with roughly 80.8% already staked. That left about 161,000 ETH un-staked, largely kept available for redemptions, fees, and day-to-day operations. Under the amended agreement signed on August 6, the trust is required to stake all of its Ether at all times except in limited cases.

Amendment shifts staking from partial use to standing rule

The rewritten trust agreement states that the fund must engage in staking for all of the trust’s Ether on an ongoing basis. The document includes specific exceptions, including amounts needed for fees, shareholder redemptions, and network emergencies, but the overall design is to push the non-staked balance down toward zero rather than maintain a large operating buffer.

That marks a stricter framework than the fund’s previous setup, under which most, but not all, of the Ether was already deployed in staking. If implemented as described, the change should increase the share of assets generating rewards and reduce the amount of ETH sitting idle inside the product.

Timing aligns with IRS staking deadline

The update arrived four days before an August 10 IRS deadline for enacting changes under rules that permit crypto funds to stake assets without creating fund-level tax. According to the source article, those rules also require rewards to be passed through to shareholders at least quarterly.

Grayscale’s revised structure goes beyond that minimum by planning to convert staking rewards into cash and distribute them monthly. That creates a regular payout schedule for shareholders while aiming to keep the product within the tax framework described in the report.

Fund had already been staking most holdings

Grayscale’s Ethereum ETF lineup had already moved into staking before this latest amendment. The company became the first US issuer to enable staking in its spot crypto funds in October 2025, according to the source article.

Since then, the Mini ETF has generated $27.3 million in net rewards. Net staking rewards were reported at 2.61% annually after fees. Even so, the August 6 figures show that a meaningful portion of the fund’s Ether remained outside staking, leaving room for higher distributable rewards if more of that balance is deployed.

Competition and next disclosures

The change comes as issuers compete on both fees and yield. The source article notes that Morgan Stanley’s Ethereum and Solana funds charge 0.14%, slightly below Grayscale’s 0.15%. It also says institutions including Intesa Sanpaolo have shifted toward staked Ethereum products this year, underscoring demand for products that add yield on top of spot exposure.

Ethereum was trading near $1,915 at the time of the report, up 0.4% over 24 hours. The article characterized staking income as a modest but steady addition to price exposure rather than a dominant return driver. The next confirmed signal will come from future disclosures, which should show how quickly Grayscale reduces the idle buffer and whether monthly cash distributions rise as a result.

Source: beincrypto.com