Solana stake ETF "SSK" performance exceeded expectations upon listing, innovative structure has drawn follow.

On July 3, the first Solana stake ETF was officially listed for trading on the Chicago Options Exchange, with a first-day trading volume of $33 million and an inflow of $12 million, exceeding market expectations. This ETF not only tracks the market price of Solana (SOL) but also provides investors with native staking rewards for Solana, managed jointly by two companies.

Compared to traditional cryptocurrency ETFs, this Solana stake ETF offers an innovative feature - variable staking reward monthly dividends, with a current dividend rate of 7.3%. An ETF analyst commented: "This is a healthy trading start," noting that the trading volume reached $8 million within the first 20 minutes of listing.

Provide direct price exposure to SOL and stake rewards

In contrast, the trading volume on the first day of the Solana futures ETF launched in March this year was only $12.1 million, lower than market expectations. The other two Solana futures ETFs have performed steadily after their launch, with average daily trading volumes remaining at a small scale, indicating that market demand has not been effectively boosted.

According to the official introduction, this ETF aims to meet the needs of various investors, including:

• Retail investors seeking exposure to cryptocurrencies through brokerage accounts
• Hope to support the bridge between blockchain innovation and mass adoption for crypto-native investors
• Financial advisors and registered investment advisors looking for compliant blockchain income channels
• Institutional investors need ETF transparency.

Official reminder: staking rewards are paid in physical form to the fund and increase its net asset value, which may result in taxable income for shareholders. Investors should consult a tax advisor for relevant guidance.

Innovative structures bypass traditional regulatory frameworks

This ETF can be launched in a short period of time, partly due to its choice of "C Corporation" registration format. This structure allows the fund to bypass the traditional ETF approval process and go public quickly. Unlike traditional cryptocurrency asset ETFs, it chooses to register under the Investment Company Act of 1940, rather than the Securities Act of 1933.

The "Investment Company Act of 1940" imposes requirements on ETFs for diversification and periodic distribution of income, avoiding investments that are considered too risky for retail investors. These restrictions make the funds under this act very suitable for equities and fixed income assets, but more complex when dealing with commodities and futures.

Unlike existing spot Bitcoin and Ethereum ETFs, this ETF falls under a different regulatory framework. This means that a qualified custodian is required to hold the underlying assets. Currently, the only bank authorized by federal regulation to both custody and stake digital assets plays this role.

Double taxation increases investment costs and may trigger imitation

This structure is also controversial, with tax issues being one of its main challenges. Since staking rewards are considered ordinary income, the fund needs to pay corporate income tax, while investors are also subject to dividend tax and capital gains tax. This results in a relatively high overall tax burden, even though the fund's management fee is 0.75%.

In addition, regulators have shown a hesitant attitude towards C corporations circumventing traditional approval processes, which casts a layer of uncertainty over the launch of more similar funds in the future. In the context of increasingly fierce market competition, this ETF may provide a reference structure for future cryptocurrency asset ETFs, but it may also face more regulatory scrutiny.

A cryptocurrency research expert explained that this structure has a low threshold for approval speed, but the downside is that the subsequent disclosure requirements are strict, requiring daily disclosures, which increases management costs. In addition, the issue of double taxation is also worth following.

The application process experienced setbacks but was ultimately approved.

In May of this year, two companies submitted applications to the U.S. Securities and Exchange Commission seeking approval to launch a C-Corp ETF focused on Solana and Ethereum. On May 30, the regulator requested to delay the effective date of the registration statement, citing concerns about whether the fund structure complies with relevant legal definitions.

On June 29, the regulatory agency notified the applicant, stating that it has "no further comments" on the Solana stake ETF application. Industry insiders typically view this statement as a tacit approval.

Analysts point out that the "unique" C-corporation format of these funds may circumvent the typical rule change procedures, and the silence from regulators seems to confirm it as a compliant solution.

Currently, multiple companies are competing for the opportunity to launch a Solana spot ETF. Analysts expect that these funds may receive approval within two to four months. There are currently at least 60 other cryptocurrency ETF proposals awaiting regulatory review and potential approval.