As yield compression persists across global markets, institutional investors are turning to blockchain staking as a credible way to earn consistent, protocol-native returns. While Ethereum has hitherto led the institutional staking conversation, Solana is quickly emerging as a complementary, and in some cases, superior, alternative with its competitive yields, maturing infrastructure, and newly available ETF-based access.
This article explores why Solana staking is gaining attention in professional investment circles, and what makes it particularly compelling when considered through the lens of custody, infrastructure, yield dynamics, and strategic portfolio design.
Why Institutions Are Warming Up to Staking
Any exploration of staking must start with its primary driver: namely, the persistent and elevated core inflation that has been a mainstay of the post-pandemic macroeconomic environment. This has impelled both retail and institutional investors alike to hunt for assets and mechanisms to protect capital from the ravages of inflation.
While bond yields remain elevated, making them appear competitive, investor confidence in what is considered the gold standard of safe-havens, yield-bearing asset classes, like US Treasuries, have recently been dented amid sovereign ratings downgrades.
Additionally, certain regulatory changes have impacted the institutional yield landscape. For example, the imposition of a first-ever mandatory liquidity fee on prime institutional money market funds (MMFs) in October 2024 (following July 2023 rule adoption) has resulted in outflows of $309 billion from prime institutional money market funds. And while this has led to a rebalancing towards government MMFs, their inherently lower yields (compared to direct T-bills or riskier alternatives) and the US's diminished credit standing are further compelling institutions to seek different yield-generating vehicles.
It is in this environment of allocators exploring alternative sources of sustainable yield, protocol-native staking returns of blockchain-based assets are increasingly being viewed as a structurally investable category.
As the sector matures, attention is shifting beyond Ethereum, and Solana's staking model offers a high-yielding, operationally light, and increasingly well-custodied alternative that is being recognized as a portfolio complement.
Solana's Staking Design: High Throughput, Low Friction
Solana uses a delegated proof-of-stake system, which allows token holders to participate in network security without running their own validator nodes. Solana’s high staking participation rate (around 70%) means that rewards are shared among a greater number of participants, yet its staking yields remain higher at 6–8% APY than Ethereum at 3–4% APY. This is due to decisions made in protocol specifications and tokenomics design, with factors such as its greater inflation rate playing a major role for the greater yield.
Since staking rewards on Solana are paid out in the native token, SOL, it’s important to note that yield in this sense is not the same as yield on dollars. If stakers choose to hold onto their staking rewards, they accumulate a greater nominal amount of tokens, and a volatility-amplified compounding effect can occur. This means that if the price of SOL continues to increase, staking rewards which are retained can meaningfully increase the total value of a portfolio. This can also continue indefinitely, as there is no inherent term length involved with staking crypto assets. Yield in this sense may be much more attractive than yield on fiat currency such as U.S. dollars.
According to Solana Compass, staking yields in Q2 2025 currently range from 6% to 8% APY. This compares favorably to Ethereum, where roughly 30% of ETH is staked and yields average closer to 3.5%. Importantly, rewards on Solana are not just inflation-based. Rather, validators also receive a portion of priority fees from network usage, introducing a demand-driven component to staking incomes.
It is important to note that a large part of the increased interest in digital asset staking is due to its increased accessibility through service providers who facilitate key management, manage validator risk, and handle infrastructure overhead for what was previously operationally complex activity.
Infrastructure Has Caught Up: ETF Exposure to Staking Yield
Institutional Solana staking was long limited by a lack of institutional-grade custody solutions. While technical wallets served power users, platforms for key management, compliance, and reporting were nascent. Now, major custodians like Anchorage Digital, Fireblocks, and Coinbase Institutional support SOL staking via integrated delegation. This critical shift allows asset managers, family offices, and hedge funds to access Solana staking through established providers, rapidly eroding prior accessibility friction.
Complementing this, institutions are also accessing Solana staking via ETFs for passive access. The 3iQ Solana Staking ETF (TSX: SOLQ, SOLQ.U), launched in April 2025, provides a regulated vehicle that integrates staking directly into its structure, an investment profile not currently offered in U.S.-listed ETFs:
- Staking Infrastructure: SOLQ delegates its SOL holdings via TwinStake and Figment, two of the industry’s leading institutional staking providers.
- On-Chain Yield Integration: Net staking rewards are retained and reflected directly into the ETF’s net asset value (NAV), enhancing long-term performance.
- Custodial Integrity: All staking is conducted through regulated custodians, with no need for unitholders to manage delegation, keys, or validator selection.
This model both grants investors price exposure to SOL and staking rewards reflected in NAV, and eliminates the need for direct validator selection, wallet interaction, or complex tax considerations.
SOLQ passed CAD $90 million in AUM within two days of launch and received early backing from institutional allocators, including ARK Invest. It has emerged as a model for how on-chain yield producing asset can be packaged into a compliant ETF format.
Conclusion: A Strategic Yield Layer in Digital Asset Allocation
In a landscape where real returns are increasingly difficult to secure, staking SOL offers a rare combination of operational ease, protocol-aligned incentives, and yield transparency. For allocators looking to generate chain-native yield without engaging in riskier DeFi practices, Solana is now supported by institutional custodians, accessible via ETF wrappers, and compelling on both a yield and risk-adjusted basis.
Whether accessed directly or through structured products like SOLQ, it is fast becoming a strategic allocation in its own right.
As staking becomes a standard component of digital asset exposure, Solana deserves closer examination by institutions seeking performance with protocol alignment. The emergence of benchmarks like the CESR (Crypto Earned Staking Rate), alongside regulated custodians and staking-enabled ETFs, is helping reinforce the credibility of staking as a mainstream investment strategy.
