Jito Labs has led a coalition of industry participants in submitting a joint letter to the U.S. Securities and Exchange Commission (SEC) advocating for Liquidity Staking Tokens (LSTs) as a core component of proposed Solana exchange-traded funds (ETFs). The signatories – including Bitwise, Multicoin Capital, VanEck, and the Solana Policy Institute – specifically addressed eight pending Solana ETF applications filed with the SEC in June 2024, urging regulators to endorse the innovative staking mechanism.
The proposal highlights LSTs’ ability to tokenize staked SOL assets, enabling trading without traditional lock-up periods while maintaining staking rewards. This approach aims to enhance liquidity and investor flexibility within ETF structures, potentially increasing market participation and confidence. Adoption of LSTs could also establish a regulatory precedent for blockchain-based funds seeking ETF approval, positioning Solana ETFs for heightened market demand through improved capital efficiency.