We know that the world of cryptocurrency can be confusing and overwhelming, particularly for those just entering the ecosystem. Ideas such as staking, validators, and blockchain protocols generally make that introduction more intimidating. With the introduction of groundbreaking financial products such as the SOLQ ETF, you too can explore the thrilling realm of Solana staking. You do not have to be a crypto expert to join us! This article will make understanding the SOLQ ETF a breeze. It reminds us how crucial Figment’s role is in helping bring this unique opportunity to life.

What is the SOLQ ETF?

The SOLQ ETF, or 3iQ Solana Staking ETF, offers investors a convenient way to gain exposure to Solana (SOL). On top of potential capital appreciation with this ETF, you’ll earn staking rewards. Solana boasts one of the highest-performing blockchains, recognized for its speed and scalability. Staking means locking up SOL tokens to help secure the network and, in exchange, receiving rewards. The SOLQ ETF combines the growth potential of Solana with the power of diversified ETFs. It provides the benefits of staking yields, creating an attractive investment instrument for Solana fans.

The ETF makes long-term investments in Solana holdings. It obtains these assets through well-known digital asset trading platforms and trusted over-the-counter (OTC) counterparties. The SOLQ ETF is unique, though, as it produces staking revenue. These benefits are subsequently flowed down directly to taxpayers. This is done by leveraging a partnership with Figment, the premier staking infrastructure provider. SOLQ ETF benefits from the regulated CME CF Solana-Dollar Reference Rate – New York Variant (SOLUSD_NY). This rate is currently a baseline for Solana (SOL).

The SOLQ ETF is significant as the first North American Solana exchange-traded product. Most notably, it directly weaves Proof-of-Stake rewards from the Solana protocol into its investment strategy. It’s publicly traded on the Toronto Stock Exchange (TSX). Anyone with a self-directed brokerage account that supports TSX-listed securities can purchase it easily. This unprecedented ease of access provides investors with a major leg up. A significant number of them will not be comfortable using crypto exchanges or taking custody of their own digital wallet.

Figment's Role in Simplifying Solana Staking

As depicted in the SOLQ ETF, Figment serves as a critical lifeblood, serving a full-service, institutional-grade staking solution. Implementation and Technical Capability Staking is more technically complicated, forcing users to learn new blockchain protocols and self-custody wallets. Figment makes staking easy for ETF managers. By doing this, non-crypto natives can still earn rewards on their digital assets without having to fully understand the technology behind the scenes.

Figment’s institutional-grade infrastructure and security measures ensure it is the trusted partner for the SOLQ ETF. They guarantee the security and reliability in the staking process to keep investors’ assets secure and help them earn the most from their staked assets. Through its platform, Figment offers non-custodial staking. With Figment, you can stake SOL with us while keeping full control and custody of your assets at all times.

With Figment’s user-friendly approach to staking, non-crypto natives have the opportunity to actively stake. This intuitive staking experience is important for bringing new types of investors to the Solana ecosystem. Figment is going to play a key intermediary role between the old traditional finance system and this new world of crypto. It further democratizes giving people access to Solana staking.

SOLQ ETF vs. Direct Staking: Pros and Cons

Now for our crypto aficionados, direct staking of SOL could be viewed as a reasonable replacement for the SOLQ ETF. There are distinct advantages and disadvantages to consider:

SOLQ ETF Advantages

  • Ease of Access: The ETF is listed on the Toronto Stock Exchange, so anyone with a brokerage account that supports TSX-listed securities can buy it, without needing to use a crypto-native platform.
  • Lower Costs and Risks: The costs and risks associated with buying, holding, and selling the units of the SOLQ ETF in the secondary market and the payment of its ongoing expenses are expected to be lower than the costs and risks associated with buying, holding, and selling SOL on a regulated digital asset trading platform or through opening an individual digital asset wallet that supports SOL.
  • Tax-Efficient: The SOLQ ETF will be eligible for registered accounts in Canada, making it a tax-efficient, long-term investment option.
  • Expertise and Security: 3iQ's team actively monitors Solana network developments and implements upgrades to enhance validator security and performance, ensuring reliable performance for SOLQ investors.
  • Tax & Account Advantages: Holding an ETP may offer tax benefits or be available in accounts (like retirement accounts) where holding native crypto is restricted.

SOLQ ETF Disadvantages

  • Commissions and Fees: Investors pay management fees (though waived for the first 12 months of SOLQ) and they don’t have direct custody of the tokens.
  • Lack of Direct Custody: Investors don’t have direct custody of the tokens, which may be a concern for some investors.
  • Reliance on 3iQ: Investors are reliant on 3iQ to manage the ETF and ensure that the staking rewards are passed through to investors.

Ultimately, whether or not you should invest in the SOLQ ETF versus staking SOL directly comes down to your specific situation. It really just depends on your personal risk tolerance. The SOLQ ETF offers a promising option for crypto newcomers looking for convenience and simplicity. It’s ideal for investors who want a set it and forget it investment strategy. If you’re used to maintaining your own digital assets and wallets, then you’ll enjoy the added control and flexibility that direct staking provides. This approach has the added benefit of providing greater upside.

Nationally, the SOLQ ETF offers a new paradigm. It builds on Figment’s staking infrastructure to offer a user-friendly introduction to crypto for anyone. By simplifying the complexities of Solana staking, it opens up new investment opportunities for those previously intimidated by the technical challenges of the crypto world. This might just be how your parents are finally introduced to our cashless, connected, crowdfunded future.