Key Takeaways:
- Canary Capital files Solana ETF with integrated staking rewards.
- Marinade Finance powers institutional-grade staking for ETF.
- ETF offers dual income: price exposure plus compound staking yields.
- SEC decision expected in October 2025 amid regulatory shifts.
Canary Capital has filed a spot Solana (SOL) ETF registration with the U.S. Securities and Exchange Commission (SEC) featuring a groundbreaking staking rewards model. This ETF would allow investors to gain exposure to Solana tokens while earning staking yield, a dual-income opportunity rare in crypto investment products.
This filing positions Canary Capital as a pioneer expanding institutional access to Solana through a regulated, yield-generating vehicle. Regulatory review is underway with a decision anticipated by mid-October 2025.
Details of the Event
The proposed Solana ETF by Canary Capital is unique in combining traditional spot ETF features with liquid staking, a process where token holders earn rewards for securing the blockchain network. The ETF’s Solana holdings will be staked through Marinade Finance, a leading Solana staking protocol known for institutional-grade compliance, including KYC-verified validators and SOC 2-compliant custody. Investors in the ETF are expected to receive staking rewards compounded after fees, projected at an annual percentage yield of between 7.0% and 7.7%.
This approach offers more than mere price appreciation. Traditional ETFs track underlying asset price movements, but Canary’s Solana ETF introduces a passive income stream via staking rewards. This dual-income structure targets institutional investors, such as pension funds and endowments, which are seeking both yield generation and capital growth.
Canary Capital’s filing also addresses key regulatory concerns. It includes robust custody solutions, splitting assets between hot and cold wallets. Custodians will retain control over private keys. The ETF plans to list on the Depository Trust & Clearing Corporation (DTCC) platform, which will enhance liquidity and transparency for institutional investors.
Additionally, the inclusion of cash and in-kind redemption options offers flexibility. This allows the ETF to accommodate both token and cash settlements, reducing market disruption risks during large trades.
Solana’s active market, with daily trading volumes exceeding $1.2 billion in 2025, further supports the ETF’s liquidity. The ETF aims to facilitate institutional-scale investment into Solana. If successful, it could drive the total value locked in Solana-based DeFi ecosystems from $8 billion to an estimated $20 billion or more.
Regulatory Context and Market Implications
The SEC’s review process for Solana ETFs has experienced delays due to regulatory caution in defining digital assets like Solana within the framework of securities law. The decision deadline is currently set for October 16, 2025. However, recent regulatory developments show promising momentum toward streamlined approvals for crypto ETFs that meet established compliance criteria.
Canary Capital’s revised S-1 filing reflects an evolved regulatory strategy addressing SEC feedback from earlier submissions. By incorporating staking infrastructure and robust custody solutions, the ETF proposal aligns with heightened standards for investor protection.
The approval of Canary’s Solana ETF would mark a significant step in bridging traditional finance and blockchain technology. It represents a blueprint for future crypto ETFs integrating yield-generating mechanisms. The product’s innovative hybrid structure could attract a broader institutional investor base, bolstering Solana’s market stature and fostering growth in its DeFi ecosystem.
