Morgan Stanley has revised its proposed exchange-traded funds for Ethereum and Solana, introducing a staking mechanism that retains 95% of staking rewards within the trusts while imposing a 0.14% annual sponsor fee. The updated S-1 registration statements reveal that both the Morgan Stanley Ethereum Trust and Morgan Stanley Solana Trust will stake portions of their crypto holdings to generate extra returns for investors.
Under the new structure, staking service providers and custodians will receive 5% of staking rewards as compensation, with the remaining 95% reinvested into the funds. The sponsor will not earn any staking income beyond the management fee, ensuring that staking profits accrue directly to the trusts.
The Ethereum filing provides detailed insights into the staking process. Custodians will deposit ETH into smart contracts, while third-party providers operate validators. Staked Ether remains exposed to slashing penalties if validators violate protocol rules. As of May 18, 2026, approximately 3.64 million ETH were queued for validator activation, with Ethereum limiting activations to 56 validators per epoch, equivalent to around 57,600 ETH daily. Based on this, newly staked ETH may face a waiting period of about 63 days before earning rewards.
A separate amendment for the Solana Trust describes a similar reward-sharing model. Validators acting as delegates for the trust’s staked assets will not control the private keys of delegated SOL. Unlike Ethereum, the Solana filing does not specify a daily staking limit.
These amendments mark another step in Morgan Stanley’s expansion of digital asset products, following its entry into the spot Bitcoin ETF market earlier this year. The bank also recently partnered with Galaxy Digital to offer eligible high-net-worth clients a way to convert digital asset holdings into regulated crypto investment products, reducing onboarding times by up to 75%.