Grayscale Put $1.6B in Idle Ethereum to Work: Staking Rules Get a Major Shakeup

Grayscale has changed the trust agreement for its Ethereum Staking Mini ETF (ticker ETH), which manages $1.6 billion in Ethereum. Starting August 6, 2026, the fund will stake almost all of its 839,556 Ethereum. Previously, about 161,000 ETH were kept in reserve. This amount will now be reduced to only what's needed for essential operations, such as handling network issues, paying fees, and processing redemptions. This change makes staking the standard practice for nearly all the Ethereum the fund holds.

The main reason for this change is new IRS tax rules from late last year. These rules permit cryptocurrency funds to stake their assets without incurring taxes at the fund level. Grayscale updated its agreement shortly before an August 10, 2026 deadline to meet these regulations. A key requirement from the IRS is that any staking rewards earned must be given to the fund's shareholders at least every three months.

Because of this updated agreement, shareholders can now expect regular cash distributions. Grayscale intends to convert staking rewards into cash and pay them out to investors monthly. The fund was already staking more than 80% of its Ethereum and had earned over $27 million in net rewards since October 2025. This new agreement ensures that the remaining Ethereum that was not being staked will now be used to increase earnings.