Their joint letter is backed by stakeholders like the Solana Policy Institute and Multicoin Capital, and it points out how liquid staking could improve capital efficiency, reduce tracking errors, and enhance product flexibility by enabling in-kind transfers. However, the letter avoids addressing some of the risks of liquid staking like smart contract vulnerabilities and potential slashing. This push is very similar to efforts in the Ethereum ecosystem, where BlackRock and Grayscale are seeking SEC approval to add staking to their Ethereum ETFs. Analysts suggest that staking could boost institutional inflows by enhancing yield, potentially making Ethereum ETFs more competitive with Bitcoin ETFs. Solana ETF Backers Want Staking Solana infrastructure provider Jito Labs, along with asset managers VanEck and Bitwise, is leading a push to convince the US Securities and Exchange Commission (SEC) to approve liquid staking for Solana exchange-traded products (ETPs). They are backed by other stakeholders including the Solana Policy Institute and Multicoin Capital Management, and the group submitted a formal letter to the SEC outlining the benefits of allowing liquid staking in ETPs. Letter sent to the SEC Liquid staking allows investors to stake their tokens and still retain liquidity by receiving a derivative token in return. These tokens, which are known as liquid staked tokens (LSTs), can be freely traded, used in decentralized finance applications, or loaned out, which increases capital efficiency. The stakeholders argue that liquid staking could help ETP issuers avoid operational inefficiencies like forced rebalancing during large inflows or redemptions, which often introduce tracking errors and increase costs. According to the letter, LSTs could streamline this process by allowing in-kind transfers, giving authorized participants more flexibility. Some of the other claimed benefits include increased revenue for ETP issuers, more investment product options, and enhanced network security. Despite these advantages, the letter does not address the serious risks that are also associated with liquid staking, including the potential for smart contract vulnerabilities, depegging of LSTs, and slashing—where a portion of staked funds are forfeited due to validator misconduct. The SEC has not yet provided a formal guidance on liquid staking, although it indicated that traditional staking tied to blockchain consensus mechanisms might not qualify as a securities offering. The conversation around staking in crypto ETPs intensified quite a bit in 2025, and Solana is not the only asset under consideration. Ethereum is also in focus, with issuers like BlackRock and Grayscale seeking SEC approval to include staking in their Ether ETFs. On July 17, Nasdaq submitted a proposal to allow staking in the iShares Ethereum ETF, after a similar filing in February for Grayscale. Analysts suggest that enabling staking could greatly boost institutional interest and capital flows into Ethereum ETFs. BlackRock’s head of digital assets, Robbie Mitchnick, said earlier this year that while the firm’s Ethereum ETF has been performing well, it is still incomplete without staking functionality. Staking Could Supercharge Ether ETFs Analysts believe that if the SEC approves staking for spot Ethereum ETFs, it could spark a massive wave of institutional investment into Ethereum, potentially rivaling Bitcoin ETFs. Markus Thielen , head of research at 10x Research, shared in an interview that the addition of staking will increase yield and could dramatically transform the market. While the SEC has not yet approved staking features for Ethereum ETFs, it recently acknowledged Nasdaq’s application to add staking to BlackRock’s iShares Ethereum ETF, which suggests that progress is being made toward eventual approval. The introduction of staking could enhance the already attractive arbitrage opportunity between spot Ethereum ETFs and Ethereum futures, which currently offers around 7% annualized returns. With staking potentially adding another 3% yield, the total return could reach 10% unleveraged. When applying 2–3x leverage, institutions could see returns of 20–30% annually, making the strategy highly appealing. Thielen said this will usher in a major shift in institutional capital allocation, with a stronger focus on yield-generating Ethereum positions. Nate Geraci , president of NovaDius Wealth Management, agreed with this and suggested staking may soon become a top priority for regulators, especially after recent ETF-related filings. Meanwhile, Ryan McMillin of Merkle Tree Capital explained that yield is a critical factor for institutions like pension funds, which value consistent income and lower volatility over speculative gains. Ether ETFs offering a 3–5% yield, in addition to diversification from Bitcoin, will become highly attractive portfolio additions, especially given Ethereum's role in powering the broader crypto ecosystem. Kronos Research CEO Hank Huang said the move will create a compliant path for institutions to earn on-chain yield without managing private keys. He believes combining staking income with asset growth will certainly boost demand, increase liquidity, and raise valuations across the Ethereum ecosystem. An ETF that successfully packages staking rewards with seamless access and exits could become a new benchmark for mainstream crypto investment products.