Will Frankin Templeton’s Solana ETF Include Staking Rewards?

After weeks of anticipation, Franklin Templeton has finally entered the spot Solana ETF race. With over $1.5T in AUM (Assets Under Management), the TradFi heavyweight is the biggest institutional firm seeking $SOL ETF approval.

While far from the first ETF filling to send ripples of excitement through the Solana community, Franklin Templeton’s S-1 application includes a significant improvement over existing crypto ETFs.

TradFi Giant Joins $SOL ETF Race

On February 21st, Franklin Templeton filed an S-1 registration statement with the SEC, detailing its intention to list a spot Solana ETF. As with previous crypto ETFs, the Franklin spot Solana ETF will track the price of $SOL and enable institutional investors to gain exposure to the crypto industry’s most performant Layer-1 blockchain.

Franklin Templeton’s filing comes mere weeks after the firm incorporated the Franklin Solana Trust, a statutory trust based in Delaware. 

Solana has been on Franklin Templeton’s radar for quite some time. The institutional firm first bullposted Solana in January 2024 after admitting it was “impressed by all the activities we have seen in Solana in Q4 2023.” Franklin Templeton has since highlighted Solana’s flourishing AI sector, as well as deploying a tokenized money market fund (FOBXX) on the network.

Through its latest filing, Franklin Templeton joins other TradFi players in the race to list Solana ETFs on Wall Street, including VanEck, Grayscale, 21Shares, Bitwise, and Canary Funds. It’s worth noting that Franklin Templeton is the largest institutional firm to file a Solana ETF. With over $1.5T in AUM, Franklin Templeton boasts more Assets Under Management than the five other filers combined.

Franklin Templeton ETF to Include Staking?

Beyond inspiring excitement and enthusiasm toward $SOL, Franklin Templeton’s S-1 Solana ETF filing gives potential investors and analysts a deeper understanding of the fund’s structuring.

Remarkably, the filing suggests that Franklin Templeton’s Solana ETF may include a mechanism to implement staking rewards.

“The Sponsor [Franklin Templeton] may, from time to time, stake a portion of the Fund’s assets through one or more trusted staking providers… In consideration for any staking activity in which the Fund may engage, the Fund would receive certain staking rewards of Solana tokens, which may be treated as income to the Fund.”

Since the inauguration of a crypto-friendly administration in the United States, policy makers have been eager to gain a better understanding of staking in an institutional context. 

Earlier in February, Hester Pierce’s Crypto Task Force began liaising with Solana staking operator Jito Labs and VC firm Multicoin Capital to discuss how staking, and potentially LSTs, can be implemented in ETPs.

In the filing, Franklin Templeton named Coinbase Custody Trust Company, LLC, as its trusted custodian. If approved, shares in the fund are be listed on the Cboe BZX Exchange.

SEC Dismisses Case Against Coinbase

In yet another legal victory for the crypto space, Trump’s SEC has agreed to dismiss its outstanding case against Coinbase, a popular crypto exchange.

Delivered during the SEC’s Gary Gensler era, the lawsuit argued that several of Coinbase’s listed assets, including $SOL, were unregistered securities. On top of the case’s dismissal being a landmark moment for crypto regulation in the U.S., it also eliminates potential obstacles that might hinder Solana ETF approval.

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