Ethereum and Solana Propose Staking Yield Reductions Amid Grayscale ETF Changes

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 the changes expected around Aug. 7.

Solana and Ethereum are each weighing protocol changes that would reduce that income at the source.

Solana developers want to accelerate disinflation enough to cut modeled staking yield from 5.84% today to 2.25% within three years. Ethereum researchers have filed a draft proposal that would burn an expanding share of validator rewards as more ETH gets staked.

Ethereum and Solana proposed models

Solana's SIMD-0550 would double the network's annual disinflation rate from 15% to 30%. That reaches the 1.5% terminal inflation rate in about 2.8 years, well inside the 5.7 years the current schedule would take.

Under the proposal's 68% staking assumption, modeled nominal yield falls from 5.84% today to 4.34% in year one, 3.00% in year two, and 2.25% in year three.

The tradeoff is 18.9 million fewer SOL entering circulation over six years, worth roughly $1.47 billion at SOL's current price near $77.97, close to the $1.51 billion the proposal's authors cite as their own reference figure.

Under the current schedule, an investor staking through that same three-year window would compound roughly 13.15% in simple yield, while the proposed schedule falls to about 9.89%. SOL would need roughly 3% more price appreciation over three years to make an investor whole on total return.