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Crypto asset manager Bitwise has launched a solana staking ETP in Europe with the ticker BSOL, Lightspeed has learned exclusively. Solana staking firm Marinade will be Bitwise’s staking provider.
The move comes less than a month after Bitwise signaled its plans to list a solana ETF in the US by registering a statutory trust in Delaware. Bitwise’s decision to build out its SOL staking infrastructure could also give it the capacity to offer staking rewards for its US spot SOL ETF. Current US applications all have staking rewards stripped out due to securities law concerns, but some are speculating that might change under a Paul Atkins-led SEC.
Another US-based crypto asset manager made a similar move in recent months when VanEck began a SOL staking partnership with Kiln.
Bitwise first offered a European solana ETP when it acquired London-based ETC Group and its ESOL product, which currently holds $24 million in assets under management, down from $27 million a month ago. Investors’ problem with ESOL is likely its lack of staking rewards, which have been quite lucrative for solana investors in recent months. BSOL has staking rewards baked in.
Solana staking rewards come from SOL issuance, priority fees and MEV tips that users and the network pay out to validators who run the blockchain’s software. Validators pass these rewards onto stakers to compete for staked SOL. For stakers, the reward rate is around 8% annually, according to Solana Compass. This is more than double the average staking APY on Ethereum.
To be clear, solana ETP issuers don’t pay this full amount. 21Shares’ solana staking ETP, the fifth-largest crypto ETP in Europe, pays 5.49%. Bitwise will pay 6.48%, according to a document shared with Blockworks, and it is using Marinade as its staking provider, Bitwise CEO Hunter Horsley said. 21Shares also charges a 2.5% management fee, while BSOL will cost investors 0.85% per year.
Again, none of the US solana ETFs would include staking rewards as currently constructed. But that order of things may not last. Bitwise’s staking provider Marinade hired New York-based banking executive Hadley Stern to be its chief commercial officer in September, perhaps to prepare for a rush of US institutions looking to access solana staking yield.
It’s impossible to know exactly how the future might play out, but with VanEck and now Bitwise adding solana staking ETPs to their portfolios, something like this is plausible: Atkins comes to power, SOL staking rewards are deemed not to be securities, spot ETF issuers re-file with staking rewards attached, and firms use their European staking ETP infrastructure to offer the same products in the US.
But I wouldn’t bank on that happening very soon. Bloomberg ETF analyst Eric Balchunas said today he expects SOL ETFs to be approved in the US only after BTC and ETH combo, Litecoin, and HBAR products all have gotten the go-ahead.
Updated Dec. 18, 2024 at 3:40 pm ET: Clarified that Solana’s staking rewards come from priority fees and MEV tips in addition to SOL issuance.
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