Cryptocurrency exchange-traded fund (ETF) issuers are poised to collaborate with centralized staking providers following recent regulatory approval, but the trend is expected to shift towards decentralized protocols as regulatory frameworks evolve. The Securities and Exchange Commission’s (SEC) recent announcement on August 5 that liquid staking activities and staking receipt tokens do not constitute securities offerings marked a significant milestone for staking-enabled crypto ETFs.
VanEck and Jito recently filed for a Solana liquid staking ETF on August 22, after months of regulatory engagement that began with SEC discussions in February. This move represents a growing trend among ETF issuers to partner with liquid staking protocols, with Canary Capital and Marinade also establishing similar collaborations. While some issuers may initially opt for centralized providers due to clearer compliance guidelines and legal structures, industry experts anticipate a gradual shift towards decentralized integrations as the regulatory landscape matures.
Max Shannon, a senior research associate at Bitwise, suggests that most issuers will likely engage with centralized providers initially, with potential DeFi partnerships facilitated through intermediaries to navigate regulatory complexities. However, as regulations evolve, a transition towards hybrid or direct DeFi integrations is anticipated. Sid Powell, CEO of Maple Finance, highlights the growing role of established custodians like Coinbase and Fidelity in facilitating ETF operations, with a shift towards DeFi integration on the horizon.
Misha Putiatin, co-founder of Symbiotic, emphasizes the revenue diversification opportunities presented by both centralized and decentralized staking options. He notes that ETFs can leverage multiple revenue streams through a range of assets, with strong decentralized protocols offering competitive advantages in compliance, financial integration, and performance metrics.
The anticipated influx of institutional capital into liquid staking protocols is expected to transform DeFi infrastructure into a core component of the financial ecosystem. Powell predicts that ETF and digital asset treasury structures will drive significant capital flows through qualified custodians into staking protocols, potentially increasing assets under management significantly. While there are concerns about concentration risk and regulatory scrutiny on heavily utilized protocols, industry experts remain optimistic about the potential for enhanced liquidity and utility in the staking market.
The evolving relationship between ETF issuers and DeFi protocols is also expected to reshape yield structures, opening the door to more active strategies that require specialized crypto expertise. Regulatory clarity surrounding staking ETFs positions them as a vehicle for capturing institutional capital, while maintaining compliance through established custodial relationships. Overall, the integration of staking protocols into ETF offerings signals a significant shift towards decentralized finance in the crypto industry.