Solana infrastructure supplier Jito Labs, asset managers VanEck and Bitwise and two different stakeholders are appealing to the US Securities and Trade Fee (SEC) to permit liquid staking for Solana exchange-traded merchandise (ETPs).
Liquid staking is a type of allocating tokens to a validator whereas receiving a by-product token in return, successfully that means the staked tokens aren’t “locked up.” Liquid staked tokens (LSTs) will be traded, utilized in decentralized finance and even loaned. Nevertheless, the method introduces further dangers not seen in conventional staking processes.
Teams interesting to the SEC, together with the Solana Coverage Institute and Multicoin Capital Administration, argue that liquid staking may enhance capital effectivity by permitting ETP issuers to keep away from compelled rebalancing.
“If issuers are compelled to restrict staking to a set proportion of belongings, giant creations and redemptions would power rebalancing, thereby growing the prices of working the ETP and introducing potential monitoring error,” the letter reads. “LSTs may very well be used to rebalance shortly in that situation and will even be delivered or acquired in-kind by [authorized participants]…”
Further advantages cited within the letter embrace elevated safety to the community, extra product choices for buyers and extra income for ETP issuers. No less than 9 Solana (SOL) ETPs are presently awaiting a call from the SEC.
The letter doesn’t cowl the dangers of liquid staking, amongst them being good contract bugs or vulnerabilities, depegging occasions and slashing dangers. The SEC has not issued formal steering on liquid staking, although it has stated conventional staking may not constitute a securities offering if it’s immediately tied to a consensus course of.
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Crypto ETP staking a hot-button concern in 2025
Solana isn’t the one cryptocurrency advocates wish to see staked in ETPs. Issuers of Ether (ETH) funds are additionally searching for approval for staking options.
On July 17, Nasdaq filed an application with the SEC to permit staking in BlackRock’s iShares Ether ETF. The inventory change filed similar applications for Grayscale on February.
Some analysts are additionally bullish on the prospect, saying that including staking to Ether ETFs may allow for an influx of institutional capital into these funds.
In March 2025, BlackRock’s head of digital belongings, Robbie Mitchnick, stated that whereas the agency’s Ether ETF has been profitable, it has been “less perfect” without staking.
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