Who Wins with Solana Staking ETFs? Investors or Large Validators?
This article was first published on The Bit Journal.
Solana (SOL) exposure through exchange-traded funds is changing how investors access on-chain yield and how the network distributes power. Some ETFs don’t stake SOL at all, while others embed delegation and reward pass-through.
For years, the network encouraged native staking. Over two-thirds of circulating SOL was delegated to validators earning around 6% annual yield. Now, new ETF models risk changing that.
Native Staking Culture on Solana and the Arrival of ETFs
Solana has built a strong on-chain staking culture. More than 66% of its circulating supply is delegated, earning rewards from inflation plus transaction fees. This native model supports decentralization by distributing stake across many validators.
The arrival of ETFs offering SOL exposure, from U.S. stake-enabled funds like SSK (REX-Osprey) or BSOL (Bitwise), to Hong Kong’s non-staking spot product (e.g., ChinaAMC Solana ETF), is a big feat.
Some U.S.-stake-enabled ETFs delegate their holdings and pass rewards to investors, while other global spot funds don’t stake at all. For example, the Hong Kong product launched on October 27 doesn’t stake at all. Hence; Solana ETF staking is the key differentiator between fund models.
Staking vs Non-Staking ETFs: Mechanics and Yield
The key difference in Solana ETF staking lies in two models. Non-staking ETFs hold SOL passively and don’t delegate to validators. The Hong Kong spot product, for example, charges a 1.99% fee and provides exposure without taking rewards.
Investors in such funds miss out on the 6% yield native stakers earn; the fee drag effectively turns the yield negative versus holding SOL directly.
Staking-enabled funds delegate holdings and distribute net rewards. A fund like SSK might deliver 4.8% to 5.1% after expenses (0.75% fee plus custodian/validator costs) to shareholders.
Native staking mechanics also respond when ballots change. If large amounts of capital reside in non-staking funds, the fraction of supply being staked falls, raising per-staker APY.
With a circulating supply of 592.5M and a staked ratio 67%, a $1.5 billion non-staking AUM shift could push the staked ratio to 65.7% and APY from 6.06% to 6.18%.
Hence; the structure of ETF models directly interacts with on-chain yield and staking incentives.
Validator Concentration: A Hidden By-product of Staking Funds
While staking-enabled ETFs can pass yield to investors, they can also centralize control. Funds like SSK allow the custodian to assign validator delegations. If billions in SOL flow through a small number of custodians, Solana’s validator economics may tilt from “community-chosen, performance-based” to “institution-selected, fund-driven.”
That trend echoes what happened in the Ethereum ecosystem with initiatives like Lido. At one point, reports say it controlled 32% of staked ETH, raising centralization concerns.
Non-staking ETFs avoid the validator control issue entirely by not staking. But as staking-enabled funds grow, the governance and decentralization implications become more acute.
In effect, Solana ETF staking is far more than yield; it touches on network security and distribution of power. The difference between “just holding SOL” and “delegating through a fund” matters for how the chain evolves.
Global Roll-out and the Role of Solana ETF Staking in Product Design
Solana’s ETF environment is not uniform. Globally, products differ in mandate, fee structure and staking policy. In Europe, ETPs like ASOL reinvest rewards but charge high fees (2.5%), reducing net yield.
In Canada, spot Solana ETFs with staking already exist. In the U.S., newer stake-enabled products (REX-Osprey SSK, Bitwise BSOL) position staking as a feature.
Meanwhile, in Hong Kong, the first spot Solana ETF deliberately excludes staking due to regulatory caution following prior incidents (e.g., staking-provider hacking) and hence emphasizes pure price exposure.
Thus, Solana ETF staking is embedded as a design choice: either traders want yield + stake (and accept fund/custodian model) or they want spot exposure only and forego staking return.
The international variation also provides a natural experiment. Will investor flows prefer yield-enabled vehicles or pure spot wrappers? And how will that preference influence Solana’s on-chain economics?
What to Watch in the Era of Solana ETF Staking
Given the mechanics and implications of Solana ETF staking, several variables stand out. Larger fund sizes could alter the staking ratio significantly, thereby nudging APYs. Also, if a handful of custodians control large delegations, decentralization metrics may shift.
Investors will compare what they get from ETF structures versus native staking options (such as liquid staking tokens). Regulatory clarity and product mandates; for example, Hong Kong’s exclusion of staking reflects how policy shapes product design.
Finally; as non-staking funds grow, native staking yields may rise, potentially pulling liquidity back on-chain. All of these factors determine how Solana’s staking economy will morph in the era of regulated exposure.
Through the lens of Solana ETF staking, investors are not just choosing exposure to SOL, but choosing how the chain’s economics and governance evolve.
Conclusion
Solana ETF staking is going to be a big theme in 2025. With funds launching under two models: non-staking spot wrappers and staking-enabled funds. The choice is not just about price exposure but yield, validator control and network dynamics.
Non-staking funds reduce yield for investors but potentially increase native APY for on-chain participants.
Staking-enabled funds pass through yield but bring governance and decentralization issues. As Solana’s regulated products expand globally, the choices made by issuers, custodians, and investors will impact how the chain works, how rewards are distributed, and how decentralized the network remains.
Glossary
Solana ETF staking – A regulated Solana investment fund that holds SOL and delegates to validators, passing staking rewards to investors.
Non-staking ETF – A Solana fund that does not delegate SOL; offers only price exposure and forgoes staking income.
Delegation – The act of assigning SOL tokens to a validator node to help secure the network and earn rewards.
APY (Annual Percentage Yield) – The annualized return from staking; inflation and transaction fees for SOL token holders.
Validator concentration – When staking power is held by a few validators or custodians, it potentially impacts decentralization.
Liquid staking token (LST) – A tokenized representation of staked assets that allows users to maintain liquidity while earning staking yield.
Frequently Asked Questions About Solana ETF Staking
What’s the difference between a staking-enabled and a non-staking Solana ETF?
A staking-enabled fund delegates SOL and distributes rewards, offers yield in addition to price exposure. A non-staking fund simply holds SOL without delegating, offers only price exposure and no yield.
Does choosing a staking fund guarantee better returns?
Not necessarily. Staking funds may offer yield, but they include fees and custodial structures that reduce net gain. Investors must compare pass-through yield versus fees and compare to staking directly on-chain.
Why does validator concentration matter?
If large funds delegate through a few custodians or validators, control of network security and transaction ordering may concentrate. That could change decentralization and governance.
How does non-staking ETF growth affect regular stakers?
As non-staking funds grow, fewer tokens are staked on-chain, which increases APY for those who keep staking. That may attract native staking interest and create yield feedback.
Should investors care about Solana ETF staking model?
Yes. The model determines yield, governance influence, exposure structure and long-term implications for network economics; not just token price.
Read More: Who Wins with Solana Staking ETFs? Investors or Large Validators?">Who Wins with Solana Staking ETFs? Investors or Large Validators?

