SEC Reviews First Solana Liquid Staking ETF
The U.S. Securities and Exchange Commission is reportedly reviewing an application for the first-ever exchange-traded fund based on a Solana liquid staking token, JitoSOL. Approval would represent a significant milestone for Solana's institutional adoption, potentially driving capital inflows similar to those seen with Ethereum-based products. The move follows recent comments from former SEC Chair Paul Atkins on the agency's focus on crypto ETF market mechanics and investor protection.
The application for the VanEck JitoSOL ETF is the first of its kind in the U.S. to be based on a liquid staking token rather than the underlying crypto asset directly. This structure allows the fund to hold JitoSOL, which represents SOL staked on the Solana network, with staking rewards and MEV (Maximum Extractable Value) earnings automatically compounding into the token's value. This differs from some existing products by not distributing yield separately; instead, it's reflected in the fund's net asset value (NAV). Jito is a major liquid staking protocol on Solana, with a current Total Value Locked (TVL) of approximately $1.1 billion. This is a decrease from its peak of over $3 billion in 2025, a change reflecting both SOL's price movement and capital rotation within the Solana DeFi ecosystem. JitoSOL’s unique proposition is its integration of MEV rewards, which are earnings from optimizing transaction ordering, providing an additional layer of yield on top of standard staking rewards. This filing enters a crowded and competitive landscape for Solana-based exchange-traded products. At least eight firms, including heavyweights like Fidelity, Bitwise, and Franklin Templeton, have filed for spot Solana ETFs. Grayscale also intends to convert its existing Grayscale Solana Trust (GSOL) into a spot ETF. This intense competition is expected to make issuer fees a primary battleground for attracting assets. While there are no direct liquid staking token ETFs in the U.S. yet, several funds already offer exposure to staking yields. The REX-Osprey Solana + Staking ETF (SSK) provides exposure to spot Solana and distributes staking rewards to shareholders. Similarly, Grayscale's GSOL has integrated staking for its trust. In Europe, 21Shares has already launched a Jito-staked Solana ETP, signaling a potential pathway for similar products in the U.S. market. The regulatory environment for such a product has shifted significantly under the leadership of former SEC Chair Paul Atkins. His "Project Crypto" initiative signaled a move away from a "regulation-by-enforcement" approach towards establishing clearer rules to foster innovation. Atkins has publicly stated that most crypto assets are likely not securities, a departure from the previous administration's stance. Nasdaq has submitted the proposal for the VanEck JitoSOL ETF under Rule 5711(d), which pertains to commodity-based trust shares. The filing argues that JitoSOL is economically comparable to SOL and leverages the SEC's prior approvals of spot Bitcoin and Ether ETFs as a precedent for meeting the necessary standards to prevent fraud and manipulation. The SEC's review period for the proposal could extend up to 90 days from its publication in the Federal Register.
