Bitwise CEO Highlights Solana’s Competitive Staking Advantage Over Ethereum
Bitwise’s CEO, Hunter Horsley, suggests that Solana’s fast unstaking process could give it a significant edge in the staking ETF market as regulatory decisions loom in the United States this October.
Horsley emphasized during a conversation at Token2049 in Singapore that Solana’s ability to expedite unstaking positions it favorably compared to Ethereum. In recent times, Ethereum’s withdrawal queue has swelled, whereas Solana’s is generally resolved more swiftly. This expeditious unstaking is vital for those managing ETFs who need to ensure that assets are returned to investors without delay.
“It’s a huge problem,” Horsley noted. “The ETFs need to be able to return assets on a very short time frame. So this is a huge challenge.”
Staking means committing cryptocurrency to bolster network security in return for rewards in the same currency. Since these assets remain locked, withdrawals can be delayed, influenced by market conditions.
Horsley further remarked that Ethereum-related products have workarounds for such challenges, revealing that Bitwise’s Ethereum staking ETP in Europe uses a credit facility to maintain liquid redemptions, albeit these facilities come with costs and capacity limitations.
Another possibility he outlined includes using liquid staking tokens like Lido’s stETH, which symbolize staked assets while allowing liquidity and rewards.
Horsley’s remarks follow a spike in Ethereum’s staking entry queue, which reached 860,369 ETH in early September, marking the highest level witnessed this year. Currently, the ETH staking queue stands at 201,984 ETH, with an approximate wait of three days for entry, while the exit queue extends to about 34 days.
SOL and ETH ETFs Face Upcoming Deadlines
The U.S. Securities and Exchange Commission is expected to make critical decisions regarding pending applications for Solana and Ethereum ETFs, which include staking capabilities. Noteworthy proposals from Bitwise, Fidelity, Franklin Templeton, CoinShares, Grayscale Investments, Canary Capital, and VanEck have submitted updated S-1 documents to amend existing fund staking options.
In August, the SEC postponed its verdicts on two of Grayscale’s ETFs concerning Ether staking until the end of October. Meanwhile, staking approval for BlackRock’s iShares Ethereum Trust has been delayed to October 30.
As previously reported, 16 crypto-related funds await SEC decisions this month, but the government shutdown has resulted in limited staffing at federal agencies, likely hindering the decision-making on crypto ETFs.
