Grayscale Amends AVAX ETF Filing to Include Staking Rewards, Marking Third Issuer to Add Staking Provisions

News Brief

Grayscale has amended the S‑1 registration statement for its proposed Avalanche ($AVAX) ETF to explicitly include staking rewards, becoming the third ETF issuer to add staking language to filings with the U.S. Securities and Exchange Commission (SEC).

Grayscale has amended the S‑1 registration statement for its proposed Avalanche ($AVAX) ETF to explicitly include staking rewards, becoming the third ETF issuer to add staking language to filings with the U.S. Securities and Exchange Commission (SEC).

Key Details

• Issuer: Grayscale
• Product: Spot AVAX ETF
• Update: S‑1 amended to include staking rewards
• Milestone: Third issuer to incorporate staking provisions in SEC filings

Why This Matters

The inclusion of staking rewards represents a notable evolution in how proof‑of‑stake (PoS) assets are being positioned within regulated investment vehicles:

• Yield‑bearing exposure: Investors could gain both price exposure and on‑chain staking yield
• Improved total return profile: Staking rewards may offset fees and volatility
• Closer alignment with native economics of PoS networks like Avalanche

Just as importantly, the move signals growing issuer confidence that staking can be structured in a way acceptable to U.S. regulators.

Regulatory Context

Staking has been one of the more sensitive issues in crypto regulation, with concerns around:

• Whether staking constitutes a securities offering
• Custody, slashing, and operational risk
• Tax treatment and reward distribution

Grayscale’s amendment suggests issuers are converging on models that clearly separate:

• ETF sponsor activities
• Validator operations
• Investor entitlements to rewards

This follows similar staking‑inclusive filings for other PoS asset ETFs, indicating a broader industry push.

Market Implications

• Positive signal for AVAX: ETF‑level staking could strengthen institutional demand
• Precedent for other PoS ETFs: SOL, DOT, and other networks may follow
• ETH ETF evolution: Adds pressure for future ETH ETF amendments to revisit staking

What to Watch

• SEC feedback on staking language in amended S‑1s
• Whether staking is approved at launch or deferred post‑approval
• How rewards are handled (in‑kind vs. cash, frequency, fee treatment)

Grayscale’s move underscores a broader trend: spot crypto ETFs are evolving from passive price trackers toward instruments that reflect on‑chain economics, with staking increasingly seen as a core feature rather than an optional add‑on.