VanEck Files to Launch ETF With Jito's Liquid-Staked Solana Tokens

North America
Source: DecryptPublished: 08/23/2025, 05:14:00 EDT
VanEck
JitoSOL
Solana
Liquid Staking Tokens
Crypto ETF
SEC Regulation
Solana. Image: Decrypt.

News Summary

VanEck has filed an application with the U.S. Securities and Exchange Commission (SEC) to launch an exchange-traded fund (ETF) that tracks the price of JitoSOL. JitoSOL is a Solana liquid-staking token, and its ETF is designed to offer investors the highest possible yield, with 100% of the fund earning staking rewards at the lowest fees. The ETF will also support in-kind creations and redemptions. This development follows the SEC's rulings in May and August, determining that both protocol and liquid staking do not qualify as securities transactions, thereby clearing a compliant path for LST-based ETFs. The Jito Foundation notes this is the first proposed spot Solana ETF to receive 100% backing from a liquid-staking token. This filing also comes shortly after issuer REX-Osprey integrated staking rewards into its Solana ETF via a partnership with JitoSOL.

Background

Staking refers to the process of locking up cryptocurrencies on a blockchain to secure the network in exchange for rewards, usually in the form of tokens. Liquid-staking tokens (LSTs) are tokenized assets that serve as a stand-in for an asset that has already been staked on a network. The U.S. SEC recently determined that both protocol and liquid staking do not qualify as securities transactions, clearing a path for their inclusion in exchange-traded funds (ETFs). Furthermore, the SEC voted in July to green-light in-kind creations and redemptions for crypto ETFs.

In-Depth AI Insights

What are the broader implications of the SEC's recent rulings on staking and LSTs for the crypto ETF market beyond just Solana? - Regulatory Clarity: The SEC's decision provides much-needed regulatory clarity for the crypto asset class, particularly for yield-generating products. This reduces legal uncertainty for institutional investors entering the market, potentially attracting more traditional finance participants. - Mainstream Adoption: Allowing LSTs in an ETF wrapper is a significant step towards mainstream adoption of crypto assets. It enables investors to gain exposure to staking rewards through regulated financial products, which is more accessible than direct on-chain staking. - Competitive Landscape: This ruling will accelerate competition in the LSTs ETF space. With major issuers like VanEck entering, other asset managers will be pressured to launch similar products, potentially driving product innovation and fee competition. - Market Maturation: The classification of LSTs as non-securities suggests a more nuanced understanding and categorization of crypto assets by regulators, contributing to the market's evolution towards greater maturity and regulation. How might the claim of "highest possible yield" for the JitoSOL ETF influence investor behavior and the potential risks associated with yield-focused crypto products? - Attracting Yield-Hungry Investors: The promise of high yield will attract investors seeking returns above those offered by traditional financial products. In a low-interest-rate environment, yield-generating crypto products hold strong appeal for both retail and institutional clients. - Risk of Yield Compression: If such products are successful and see significant inflows, there is a risk of future yield compression. As more staked assets are channeled through ETFs, the pool of staking rewards could dilute, leading to potentially lower returns over time. - Smart Contract and Technical Risks: Investors must be aware that LSTs like JitoSOL, even within an ETF wrapper, are still exposed to underlying technical risks such as smart contract vulnerabilities, network attacks, and protocol upgrades. These risks can lead to loss of principal or disruption of yield. - Regulatory Scrutiny: Yield claims are likely to draw further scrutiny from regulators, particularly regarding their sustainability and risk disclosures. Issuers will need to ensure their marketing complies with existing and future investor protection regulations. What strategic advantages does VanEck gain by being an early mover in the LST-backed ETF space, especially with JitoSOL? - First-Mover Advantage: By being among the first to file for a JitoSOL ETF, VanEck establishes a first-mover advantage in this emerging market segment. This helps in building brand recognition and capturing early market share in this specific product category. - Brand and Trust: VanEck, as an established asset manager, entering the LSTs ETF space can enhance investor confidence in crypto yield-generating products. This trust is crucial for attracting traditional investors who may be cautious about the crypto space. - Scale and Liquidity: Early success could lead to larger assets under management, which in turn enhances the ETF's liquidity and provides VanEck with greater negotiating power and economies of scale. - Setting Market Standards: As an early participant, VanEck has the opportunity to influence product design, fee structures, and operational standards within this segment, potentially setting precedents for future product offerings and market positioning.