Grayscale’s Ethereum and Solana staking ETFs are about to deliver cash distributions to shareholders, but protocol-level proposals on both networks could shrink the reward pool those funds are built to distribute. The tension was underscored by a new 21Shares filing showing its staked Ethereum ETF processed $48.4 million in redemptions during the first half of 2026 while keeping 86.42% of its ETH holdings staked as of June 30.
According to the 21Shares filing, TETH redemptions generated $48.426 million in distributions against $42.174 million in contributions, leaving a $6.251 million net redemption gap. The fund sold 21,125.2745 ETH for cash redemptions, and net assets fell from $31.298 million at the end of December to $12.917 million at June 30. The reference price of ETH dropped 46.89%, contributing to a realized loss of $12.769 million on ETH sold for redemptions and cutting net asset value per share from $14.83 to $7.88. The trust ended June with about 8,185.4684 ETH, roughly 7,074 ETH staked and 1,112 ETH unstaked.
Meanwhile, Grayscale’s July 17 SEC filings said its Ethereum and Solana staking ETFs would convert staking rewards to cash and distribute them to shareholders at least quarterly, with changes expected around Aug. 7. That framework now faces pressure from supply-side reforms on both networks.
Solana’s SIMD-0550 would double the annual disinflation rate from 15% to 30%, reaching a 1.5% terminal inflation rate in about 2.8 years instead of 5.7 years. Under the proposal’s modeling, staking yield falls from 5.84% today to 4.34% in year one, 3.00% in year two, and 2.25% in year three. Over six years, it would remove about 18.9 million SOL from circulation, worth roughly $1.47 billion near a SOL price of $77.97. Investors staking through three years would earn about 13.15% in simple yield under the current schedule versus about 9.89% under the proposal, requiring roughly 3% additional SOL price appreciation to offset lost income.
Ethereum’s EIP-8363, filed as a draft in early August, would burn an increasing share of validator issuance as the staking ratio climbs, with the burn reaching 100% once roughly half of ETH supply is staked. One author warned that without reform, continued validator entry could push more than 70 million ETH—over 55% of supply—into staking by January 2028. The goal is to stop paying ever more issuance to attract stake once enough ETH already secures the chain.
For non-staking ETH and SOL holders, reduced issuance means less dilution. For passive stakers and ETF shareholders, the reward pool shrinks. Smaller validators face margin pressure, while DeFi borrowers and liquidity providers may benefit if lower staking yields reduce the hurdle rate for taking risk elsewhere. Grayscale’s cash-distribution framework standardizes payout timing, but lower protocol-level rewards would eventually mean smaller distributions, making the funds’ income pitch dependent on whether markets price in scarcity strongly enough to offset lost yield.
