Challenges of Approving Solana ETF
Last week, Brazil approved the Solana exchange-traded fund (ETF) for the first time, followed by the United States, sparking a debate. However, some financial experts remain skeptical due to concerns about the native token SOL. The core problem lies in the large daily issuance of SOL tokens.
High Token Issuance and Market Demand
As of August 11, data from the Dune dashboard reveals that 162,503 SOLs have been issued, valued at approximately $25 million. These tokens are rewards distributed to validators for network security. Critics argue that the high issuance rate could potentially destabilize the asset’s long-term value by creating increased selling pressure. Smartestmoney.eth questioned the market demand for SOL, considering its high issuance rate.
Unlocking Schedule Concerns
Further concerns revolve around the unlocking schedule of SOL tokens, with a large-scale unlocking of 7.5 million SOL planned for March 2025. This has raised doubts about the potential impact on the Solana ecosystem and the value of the token. Investors and analysts are closely monitoring this development.
Network Stability and Institutional Interest
Griffin Ardern, director of Blofin Research & Options, highlighted the historical network stability issues faced by Solana. There have been major outages and incidents that raise questions about the maturity and stability of the network. These factors could potentially impact institutional interest and investor confidence in the Solana ecosystem.
Despite these challenges, asset managers like Van Eck and 21 Shares have applied for Solana ETFs in the United States. The industry remains cautiously optimistic about the potential for a Solana ETF, but key issues such as token issuance, unlocking schedules, network stability, and institutional interest need to be carefully considered.
