Push for liquid staking in Solana ETFs gains institutional support

Though it has weighed in on traditional staking, the US Securities and Exchange Commission has not issued guidance on liquid staking.

Solana infrastructure provider Jito Labs, asset managers VanEck and Bitwise and two other stakeholders are appealing to the US Securities and Exchange Commission (SEC) to allow liquid staking for Solana exchange-traded products (ETPs).

Liquid staking is a form of allocating tokens to a validator while receiving a derivative token in return, effectively meaning the staked tokens aren’t “locked up.” Liquid staked tokens (LSTs) can be traded, used in decentralized finance or even loaned. However, the process introduces additional risks not seen in traditional staking processes.

Groups appealing to the SEC, including the Solana Policy Institute and Multicoin Capital Management, argue that liquid staking could improve capital efficiency by allowing ETP issuers to avoid forced rebalancing.

Read more