Staking the Claim: Solana ETFs Bridge DeFi and Mainstream Finance

The U.S. Securities and Exchange Commission (SEC) is nearing a decision on spot Solana (SOL) exchange-traded fund (ETF) proposals, with analysts estimating a 90% probability of approval by mid-October 2025. The updated filings from major asset managers, including Franklin Templeton, Fidelity, CoinShares, Bitwise, Grayscale, VanEck, and Canary Capital, now incorporate staking features, enabling investors to earn yield on Solana holdings. This development aligns with the SEC’s recent regulatory shifts, which streamlined approval timelines for commodity-based ETFs, reducing the standard review period from 240 days to 75 days for straightforward casestitle1^[1]. The inclusion of staking, a mechanism where investors secure the Solana blockchain to earn rewards, signals a growing institutional appetite for yield-generating crypto products and marks a potential precedent for similar approvals in Ethereum and other proof-of-stake networkstitle2^[2].

The revised S-1 filings submitted by these firms reflect a coordinated effort to address the SEC’s prior concerns, including custody arrangements and validator centralization. For instance, Fidelity’s proposal explicitly outlines staking strategies to generate yield, while Grayscale’s application seeks to convert its existing Solana Trust into an ETF. The amendments, some marked as “Amendment No. 4,” demonstrate ongoing dialogue between regulators and issuers, with the SEC requesting additional disclosures as early as August 2025title3^[3]. Analysts, including ETF Store president Nate Geraci, suggest approvals could arrive within two weeks, citing the SEC’s accelerated processing of recent Ethereum-related ETFs and the unified approach of applicantstitle4^[4].

The regulatory environment has shifted significantly, with the SEC’s adoption of “generic listing standards” for commodity-based ETFs reducing barriers to entry. This change has expedited Solana ETF applications, which now face a more predictable approval timeline compared to prior crypto-related filings. The SEC’s evolving stance is evident in its acceptance of staking as a legitimate feature within ETF structures, a departure from earlier objections rooted in concerns over reward classification and custody. The integration of staking into ETFs blurs the line between decentralized finance (DeFi) and traditional finance (TradFi), offering investors both price exposure and passive incometitle5^[5].

Market momentum further supports the likelihood of approval. Solana’s price has surged 30% in 2024, while early Solana ETF products, such as REX-Osprey’s staking fund, have attracted over $300 million in assets under management. European launches, like Bitwise’s staking ETP, have seen $60 million in inflows within five days, underscoring global demand. Analysts argue that Solana’s high transaction throughput (65,000 per second) and adoption in DeFi and NFTs make it an attractive candidate for institutional portfoliostitle6^[6]. If approved, the ETFs could drive broader adoption by simplifying access to Solana for both retail and institutional investors while enhancing liquidity and price discovery.

The potential approval of Solana ETFs also has broader implications for the crypto ecosystem. It could catalyze similar applications for Ethereum and other proof-of-stake blockchains, reshaping how investors engage with digital assets. The SEC’s validation of staking as a legitimate investment feature may pave the way for yield-based products across multiple networks, fostering a more mature institutional market. However, challenges remain, including regulatory scrutiny of Solana’s classification as a commodity versus a security and the need for robust custody solutions. Despite these hurdles, the momentum behind Solana ETFs reflects a growing consensus that crypto assets are becoming integral to mainstream financetitle7^[7].