Solana stake ETF successfully launched, innovative structure attracts follow

On July 3rd, the first Solana stake ETF was officially listed for trading on the Chicago Options Exchange. This product, named REX-Osprey Solana stake ETF (code: SSK), exceeded expectations on its first day with a trading volume of $33 million and an inflow of $12 million.

This ETF not only tracks the market price of Solana (SOL), but also provides investors with native staking rewards of Solana. Currently, its dividend yield is 7.3%, distributed in the form of variable staking reward monthly dividends. This innovative feature distinguishes it from traditional crypto asset ETFs.

Compared to the recently launched SOL futures ETF, SSK's first-day performance is even more impressive. The first-day trading volumes of several Solana futures ETFs launched in March this year were all lower than that of SSK, indicating an increased market demand for such products.

The target customer groups of SSK include retail investors seeking access to cryptocurrencies through brokerage accounts, crypto-native investors supporting blockchain innovation, financial advisors in need of compliant blockchain income avenues, and institutional investors who value ETF transparency.

It is worth noting that SSK has adopted the registration form of a "C corporation," which allows it to bypass the traditional ETF approval process and go public quickly. It has chosen to register under the Investment Company Act of 1940, rather than the Securities Act of 1933. While this structure accelerates the listing process, it also brings some challenges, such as the issue of double taxation.

Since staking rewards are considered ordinary income, the fund must pay corporate income tax internally, and investors also have to bear dividend tax and capital gains tax. This results in a higher overall tax burden, even though the fund's management fee is only 0.75%.

Moreover, the SEC's attitude towards this innovative structure remains uncertain. Although the SSK ultimately received approval, the SEC had previously requested to delay the effective date of its registration statement, citing concerns about whether the fund structure meets the definition of "investment company" under the Investment Company Act of 1940.

Market analysts point out that the successful listing of SSK may provide a reference model for other cryptocurrency ETFs, but it may also face more regulatory scrutiny. Currently, multiple companies have applied to launch a Solana spot ETF, which is expected to be approved in the coming months.

Overall, the launch of SSK provides traditional investors with a way to gain exposure to Solana and stake returns through regular brokerage accounts, significantly lowering the participation threshold. However, the long-term impact and regulatory outlook of this innovative structure remain to be seen.