Fidelity Investments submitted a pre-effective amendment to its S-1 registration statement with the U.S. Securities and Exchange Commission (SEC) for a proposed spot Solana ETF, advancing the product toward potential automatic effectiveness.
This update removes the previously included “delaying amendment” under Rule 473, which had allowed the SEC to control the timing of approval. As a result, the registration could become effective automatically after the statutory 20-day review period, potentially enabling a launch as early as mid-November 2025 if no objections arise.
The Filing Staking Strategy
The ETF plans to stake nearly 100% of its Solana (SOL) holdings through institutional custodians like Coinbase and BitGo. This aims to generate approximately 7% annual yield for investors, exceeding the fund’s benchmark (Fidelity Solana Reference Rate).
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Staking addresses regulatory concerns by using vetted validators and maintaining a small liquid SOL reserve for daily operations. A management fee of 0.25% is proposed, with a waiver for the first six months or until the fund reaches $1 billion in assets under management (AUM), whichever comes first.
The fund will track SOL’s spot price using a proprietary index, emphasizing Solana’s high throughput up to 65,000 transactions per second and low fees fractions of a cent per transaction compared to Bitcoin with 250 TPS, ~50 cents and Ethereum with 800 TPS, ~50 cents.
Fidelity warns of potential SEC classification of SOL as a security, which could impact operations, alongside ongoing concerns over market manipulation and custody.
This filing follows an SEC acknowledgment of Fidelity’s initial proposal in April 2025 and a Cboe 19b-4 listing application in March 2025. It aligns with a broader wave of altcoin ETF momentum, spurred by an August 2025 SEC ruling clarifying that staking does not constitute a securities offering.
The U.S. spot Solana ETF market kicked off on October 28, 2025, with three products debuting and capturing over $81 million in combined first-day inflows.
Bloomberg Intelligence estimates Solana ETFs could attract over $3 billion in inflows within the first year, mirroring Bitcoin and Ethereum trends. Fidelity’s entry, with its aggressive staking and low fees, positions it to challenge leaders like Bitwise.
Other firms, including VanEck and Franklin Templeton, have also updated filings to include staking. SOL dipped ~6% on October 30 amid broader market volatility but remains up significantly YTD.
X discussions highlight optimism around institutional inflows, with users noting the filing as “rocket fuel” for SOL’s price toward $400. However, regulatory hurdles persist, and approval isn’t guaranteed. This development underscores Wall Street’s deepening crypto integration, potentially boosting Solana’s liquidity and accessibility for retail and institutional investors.
Solana uses proof-of-history + Tower BFT; slashing is rare and only for egregious faults. Validators can lose staked SOL if they sign conflicting blocks or go offline too long. ETF uses institutional validators with 99.9%+ uptime and redundancy. No investor-level slashing.
Only ~0.0003% of staked SOL has ever been slashed per Solana Foundation. If Coinbase or BitGo is breached, staked SOL could be stolen. Fidelity holds insurance up to $320M via Coinbase plus cold storage. Still, not 100% guaranteed.
Smart contract bugs in staking pools. Third-party staking protocols (e.g., Marinade, Jito) can have exploits. Fidelity bypasses DeFi pools — stakes directly via trusted validators. Lower code risk. 2022–2023 saw $2B+ in DeFi hacks; institutional staking avoids most of this.
Staked SOL cannot be sold instantly. During a price crash, you’re locked in. ETF shares trade intraday on exchange, but underlying SOL is locked. In extreme sell-off, ETF may trade at discount to NAV (e.g., -5% or more).
During June 2025 dip, staked SOL holders couldn’t exit; ETF would’ve allowed share sales at a potential discount. Staked SOL earns ~6–8% APY but can’t be used in DeFi lending, liquidity pools. Solana’s inflation is ~5.4% annually (2025), gradually decreasing. Staking yield partially offsets this, but not fully if price stagnates.
Net real yield: ~2–3% after inflation assuming 7% staking APY. If SEC declares SOL a security could force ETF to halt staking or liquidate. Fidelity’s S-1 warns: “If SOL is deemed a security, the Trust may need to cease operations.”
Staking rewards currently taxed as income. Future laws could worsen. ETF investors receive no direct rewards — yield is reinvested, taxed only on capital gains when selling shares.
Solana has had 7+ major outages since 2021 longest: 17 hours in Sep 2021. Staking continues, but rewards pause during downtime. ~33% of stake controlled by top 19 validators. Theoretical 51% attack risk. Fidelity mitigates by diversifying across multiple top-tier validators.
Staking risk is dramatically reduced vs. DIY staking — but not zero. Biggest residual risks: ETF trading at discount/premium during volatility. Treat Solana ETF staking like a high-yield bond with crypto volatility — not a risk-free 7% cash equivalent.