Morgan Stanley passes 100% of staking rewards to investors on new Ethereum and Solana ETFs

Wall Street’s long-standing reputation for finding creative ways to clip fees is taking a hit today. Morgan Stanley Investment Management launched two new exchange-traded products on July 28, and the bank is forwarding every dollar of staking yield straight to shareholders, keeping none of it beyond its standard management fee.

The Morgan Stanley Ethereum Trust (ticker: MSSE) and Morgan Stanley Solana Trust (ticker: MSOL) began trading on NYSE Arca, offering investors direct exposure to ether and SOL with a staking overlay baked in from day one.

How the economics actually work

The sponsor fee sits at 0.14%, which is about as thin as expense ratios get in the ETF world. Of the gross staking rewards generated, 95% flows back to the trusts and ultimately to shareholders. The remaining 5% goes to the staking service providers and custodians who do the operational work.

Staking providers include Figment, Galaxy Blockchain Infrastructure, and Coinbase Canada. Custody duties are split between BNY Mellon and Coinbase, giving the products a dual-custodian structure that larger institutional investors tend to prefer.

On the staking utilization side, MSSE will stake between 50% and 80% of its ether holdings. MSOL takes a more aggressive posture, targeting up to 100% of its SOL holdings for staking.

The implied yield rates are roughly 1.7% for ether and approximately 3.4% for SOL at current base rates.

Context: Morgan Stanley’s crypto ambitions are moving fast

This is not Morgan Stanley’s first attempt at the crypto ETF market. The firm previously launched a Bitcoin ETP under the ticker MSBT, which has pulled in more than $380M in assets. That traction gave MSIM the institutional credibility and operational runway to expand into proof-of-stake assets, which carry a different regulatory and mechanical profile than Bitcoin.

The risks are not zero. Staking involves lock-up periods and slashing penalties if validator nodes behave improperly, and those operational risks sit somewhere between the staking providers and the trust structure. The 5% allocation to service providers is partly compensation for absorbing that operational risk.

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