21Shares has entered the competition for a Solana spot ETF by applying its Core Solana ETF, following VanEck’s footsteps. This move has intensified the race for crypto ETFs. However, both entities are facing regulatory challenges, as the approval of a spot crypto ETF other than Bitcoin by the SEC is still pending.
As per the S-1 filing dated June 28, the 21Shares Core Solana ETF seeks to mirror SOL’s performance, providing investors access to the native asset of the Solana blockchain without direct ownership. Managed by 21Shares US LLC and custodied by Coinbase Custody, the trust will contain SOL and value shares linked to an undisclosed index.
The filling details a specific method for authorized parties to create and redeem via cash dealings and third-party SOL partners. This framework is designed to streamline functions and potentially boost liquidity.
Highlighting potential price differences, the filing states:
Shareholders who buy or sell Shares during the day from their broker on the secondary market may do so at a premium or discount relative to the NAV of the Shares of the Trust.
However, regulatory obstacles lie ahead. Both 21Shares and VanEck recognize the potential for SOL to be categorized as a security. Their submissions suggest a willingness to end the trusts if the sponsors decide not to comply with potential regulatory mandates.
Solana market performance
Meanwhile, Solana is seeing notable growth, outperforming top cryptocurrencies with a 9% rise. According to Coinbase’s Weekly report, SOL’s success has been attributed to advancements in its ecosystem, such as ZK Compression and Blockchain Links.
ZK Compression has the potential to reduce on-chain costs by a massive factor of 1000, especially benefiting extensive token distributions. While still in the testing phase, it will significantly cut developer expenses and help in the growth of system resources.
Whereas Blockchain Links, or “blinks,” allow seamless integration of Solana actions within website interfaces, similar to Farcaster Frames. This empowers users to execute a wide range of on-chain tasks. However, this functionality is currently accessible only to desktop users utilizing specific wallet extensions.
Related Reading | VanEck files first US Solana spot ETF application
