This week marks a historic milestone as REX Shares confirms the launch of America's first Solana staking ETF—the "REX-Osprey SOL+Staking ETF" (ticker: SSK)—on Wednesday, July 2. This groundbreaking product merges cryptocurrency with traditional finance by introducing staking rewards into ETF investments, offering dual value: price exposure + passive income.
Following the announcement, SOL surged 6% to nearly $160 before stabilizing around $153, while JTO briefly spiked 8%. Though gains retracted, the market's enthusiasm underscores the ETF's significance.
Key Players Behind the ETF
The REX-Osprey ETF is a collaboration between:
- REX Shares: Innovator behind leveraged/reverse ETFs like MicroSector and T-REX.
- Osprey Funds: Crypto-focused spin-off of REX Shares (established 2021), with a track record of 100+ exchange-traded products.
Service Providers:
- Investment Advisor: REX Advisers, LLC (led by Matthew Pelletier, ex-BNP Paribas).
- Fund Administrator: Commonwealth Fund Services, Inc.
Custodians:
- Traditional Assets: U.S. Bank National Association.
- Crypto Assets: Anchorage Digital Bank.
Investment Strategy Breakdown
Core Objectives
- 80%+ Allocation to SOL: Direct exposure to Solana or equivalent assets.
- 50%+ Staking Yield: Delegates SOL to validators via custodians, earning rewards (paid in SOL, subject to lockup periods).
Share Mechanics
- Institutional-Only Creation: Minimum 25,000-share blocks for market makers/brokers.
- Secondary Market Trading: Individual shares available via broker-dealers.
Tax Implications: C-Corp Structure
Unlike typical ETFs, this fund faces double taxation:
Fund-Level Taxes:
- Capital gains taxed at corporate rates (21% federal).
- Potential 1% excise tax on excessive redemptions.
- 20% accumulated earnings tax if profits aren’t distributed.
Investor-Level Taxes:
- Dividends taxed as ordinary income (or qualified rates if held long-term).
- Capital gains from share sales follow standard short/long-term rules.
Fee Structure
- Management Fee: 0.75% annually (charged daily, paid monthly).
- Other Costs: Includes fund administration, accounting, and custody services (exact percentages undisclosed).
Market Impact & Future Outlook
Why This Matters
- Regulatory Milestone: Signals SEC’s cautious acceptance of crypto staking, paving the way for similar products (e.g., Ethereum staking ETFs).
- Institutional Adoption: Attracts pensions, mutual funds, and other long-term capital.
SOL Ecosystem Boost:
- Increased demand from ETF’s 80% SOL allocation.
- Higher staking rates elevate SOL’s "opportunity cost" for holders.
- Strengthens Solana’s decentralization.
Risks Highlighted
- Volatility, regulatory uncertainty, staking locks, and custody risks.
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FAQs
Q: How does the ETF generate staking rewards?
A: By delegating ≥50% of its SOL holdings to validators via Anchorage Digital, earning SOL-denominated yields.
Q: Can retail investors buy creation units?
A: No—only institutional players (e.g., market makers) may create/redeem blocks. Retail buys shares on secondary markets.
Q: What’s next after this ETF?
A: Watch for Ethereum staking ETFs, as REX-Osprey has already filed similar plans with the SEC.