Solana Stakeholders Urge SEC to Consider Liquid Staking for ETPs Amid Regulatory Uncertainty

Key Points

1. Liquid staking allows derivative tokens to remain tradable, enhancing liquidity and capital efficiency for Solana ETPs without locking up funds.

2. Stakeholders, including Jito Labs, VanEck, Bitwise, the Solana Policy Institute, and Multicoin Capital, have formally requested the SEC to approve liquid staking, citing benefits like reduced costs and improved tracking for ETPs.

3. Liquid staking faces regulatory challenges, including risks like depegging events and slashing, which the SEC must consider.

4. Traditional staking locks tokens, limiting liquidity, whereas liquid staking enables tokens to be traded or used in DeFi, improving capital efficiency.

5. The push for liquid staking approval is part of a broader trend, with other firms like Nasdaq and Grayscale also seeking staking options for crypto ETPs.