Solana News Today: Jito Labs and VanEck Seek SEC Approval for Solana ETPs Using LSTs

Jito Labs, VanEck, Bitwise, and other stakeholders have jointly submitted a letter to the U.S. Securities and Exchange Commission (SEC), requesting approval to include liquid staking tokens (LSTs) in Solana-based exchange-traded products (ETPs) [1]. The initiative is aimed at enhancing capital efficiency and reducing operational costs for ETP issuers by allowing the use of LSTs for in-kind rebalancing and minimizing tracking errors. The letter highlights potential benefits such as improved network security, diversified product offerings for investors, and additional revenue streams for ETP providers [2]. Currently, at least nine Solana (SOL) ETPs are awaiting SEC approval.

Liquid staking allows investors to stake their tokens while receiving derivative tokens in return, enabling them to retain liquidity and participate in decentralized finance (DeFi) activities. This mechanism contrasts with traditional staking, where tokens are locked up for a period. However, the process introduces risks such as smart contract vulnerabilities, depegging, and slashing events, which the SEC has not yet addressed formally [1].

Institutional interest in staking is not limited to Solana. Nasdaq recently filed with the SEC to allow staking in BlackRock’s iShares Ether ETF [3]. BlackRock’s head of digital assets, Robbie Mitchnick, noted that while the firm’s Ether ETF has been successful, the absence of staking features has made it “less perfect” [3]. This reflects a broader industry trend where asset managers see staking as a key differentiator in attracting institutional capital.

VanEck has taken further steps by resubmitting its application for a spot Solana ETF, signaling confidence in the regulatory and market environment [2]. The firm, like others, is advocating for the inclusion of LSTs in ETPs to align with growing investor demand for yield-generating and liquid crypto products. Bitwise has also proposed integrating liquid staking into its offerings [4], reinforcing the industry-wide shift toward leveraging LSTs for institutional-grade exposure.

Analysts are cautiously optimistic, noting that regulatory clarity on Ether staking could set a precedent for Solana ETPs [5]. However, the SEC’s position on staking mechanisms remains a key variable, and until formal guidance is issued, the path forward remains uncertain. Despite the regulatory ambiguity, the industry is moving ahead with product development and market preparation for a scenario where liquid staking becomes a core feature of crypto investment vehicles.

The convergence of institutional capital, innovative product design, and evolving regulatory discourse points to a pivotal moment in the development of ETPs for digital assets. If approved, the integration of liquid staking could significantly reshape the structure and efficiency of crypto ETFs, aligning them more closely with the dynamic and decentralized nature of the underlying assets.

Source:

[1] Cointelegraph – Push for Liquid Staking in Solana ETFs Gains Institutional ... (https://cointelegraph.com/news/jito-labs-vaneck-sec-liquid-staking-solana)

[2] AInvest – VanEck Resubmits Spot Solana ETF Application to SEC as ... (https://www.ainvest.com/news/solana-news-today-vaneck-resubmits-spot-solana-etf-application-sec-institutional-support-grows-2508/)

[3] TipRanks – Crypto Currents: Corporate digital asset treasuries top $100B (https://www.tipranks.com/news/the-fly/crypto-currents-corporate-digital-asset-treasuries-top-100b-thefly)

[4] CryptoRank – Jito Labs leads SEC petition to approve Solana liquid ... (https://cryptorank.io/news/feed/f0f65-jito-labs-request-sec-to-approve-staking)