Challenges of Approving the Solana ETF
Last week, Brazil approved the Solana exchange-traded fund (ETF) for the first time, followed by the United States, sparking a debate among financial experts. However, there are significant challenges surrounding the approval of the Solana ETF, with concerns primarily focused on the native token SOL.
High Daily Issuance of SOL Tokens
As of August 11, data from the Dune dashboard revealed that 162,503 SOLs have been issued, totaling approximately $25 million. These tokens are rewards given to validators to ensure network security. Critics express worry that the substantial daily issuance of SOL tokens could potentially destabilize the asset’s long-term value by increasing selling pressure.
Market Demand and Unlocking Schedule Concerns
Smartestmoney.eth raised doubts about the market demand for SOL, given its high issuance rate. There are also concerns about the unlocking schedule of SOL tokens owned by the now-defunct FTX, with a significant number scheduled to be unlocked in March 2025.
Furthermore, the lack of ETFs for Solana could be a limiting factor in institutional interest, as expressed by industry experts.
Network Stability and Future Prospects
Griffin Ardern highlighted historical network outages and incidents on the Solana blockchain, emphasizing the importance of network stability for investor confidence. Despite these challenges, some asset managers remain optimistic about the potential for Solana ETFs in the United States.
In conclusion, while there are significant hurdles to overcome, including market demand, unlocking schedules, and network stability, the future of the Solana ETF remains uncertain yet hopeful.
