FAQs

Find answers to commonly asked questions about how Solana (SOL) staking works and the role of validators, the specific mechanisms of staking and security measures within the 3iQ Solana Staking ETF, and the benefits of investing in SOLQ.

How does staking Solana (SOL) work?

Solana (SOL) staking works through a Proof-of-Stake consensus mechanism where token holders can participate in network security and earn rewards.  SOL holders can delegate their SOL tokens to validators, who verify transactions and contribute to the consensus mechanism of the Solana blockchain. In return for participating in transactions confirmation activities, validators receive SOL rewards, which are shared with their delegators. Like earning interest on the balance in a savings account, staking tokens allows token investors to generate yield.  As a result, staking has become a key metric for investors seeking yield-generating benefits as well as an indicator of network security, economic participation, and long-term holder commitment to a token.

What is a validator?

A validator, or validating node, is a computer that supports the Solana Network’s operation by verifying the accuracy of transactions and contributing to the consensus mechanism, thereby securing the Solana blockchain. Acting as a validator involves significant technological and financial resources. It also requires compliance with strict governance protocols, and penalties may be imposed on validators if they do not conduct their activities correctly. Validators are chosen because they are seen as reliable and seen as having a vested interest in maintaining the integrity and stability of the Solana network.

How does staking in the 3iQ Solana Staking ETF work?

SOL held in the 3iQ Solana Staking ETF’s portfolio will be staked through one or more experienced validators selected by 3iQ. 3iQ will conduct a detailed due diligence review before engaging any third-party service provider as a validator based on a number of factors such as reputation, financial status, operational security standards and reliability. Rewards earned by the 3iQ Solana Staking ETF as a result of its staking activities will, after deduction of applicable fees, will be reinvested into the ETF for the benefit of its unitholders. 

The staking activities in the ETF will generally occur as follows:

  • 3iQ will direct Coinbase, as sub-custodian, to stake a certain amount of SOL to the validator directly out of the cold wallet administered by Coinbase on behalf of the 3iQ Solana Staking ETF
  • Rewards, which will be paid in SOL subject to any bonding or lock-up period, may be earned in connection with the staking of the SOL
  • Coinbase will be entitled to a fee in respect of the rewards and will pay a portion of that fee to any party acting as validator
  • A portion of the rewards will be delivered to a wallet of 3iQ held via Coinbase as payment of the Staking Service Fee

To learn more about the risks associated with investing in the 3iQ Solana Staking ETF, please read the prospectus before investing. Copies of the prospectus may be obtained from 3iQ Corp. or at www.sedarplus.ca.

How do I know my assets are safe and secure in the 3iQ Solana Staking ETF?

The 3iQ Solana Staking ETF has retained the services of Coinbase to provide segregated cold-storage custody of its SOL tokens.  It has also carefully selected  reputable validator nodes to provide staking services. 3iQ Corp., is registered as an investment fund manager, commodity trading manager, exempt market dealer and portfolio manager with the Ontario Securities Commission.  

Coinbase is a regulated and licensed custodian of SOL. Storage of SOL is in “cold storage” where private keys have no contact with the internet and are created, stored and managed on hardware security modules located in access-guarded facilities that are geographically distributed. To date, Coinbase has never experienced a loss due to unauthorized access from its hot wallet or the cold storage vaults where the 3iQ Solana Staking ETF’s SOL will be custodied. Additionally, 3iQ intends to mitigate risks associated with staking activities conducted by its selected validators by performing  due diligence on such third-party service providers.

To learn more about the risks associated with investing in the 3iQ Solana Staking ETF, please read the prospectus before investing. Copies of the prospectus may be obtained from 3iQ Corp. or at www.sedar.com. 

Why invest in the 3iQ Solana Staking ETF (SOLQ) with 3iQ?

3iQ Solana Staking ETF (SOL) launches with a 0% management fee for the first 12 months, making it among the most competitively priced digital asset ETFs available. SOLQ will  invest in long-term holdings of Solana (SOL) purchased from reputable digital asset trading platforms and over-the-counter (OTC) counterparties in order to generate staking rewards for the fund. The 3iQ Solana Staking ETF offers a convenient way and cost effective way to indirectly invest in  SOL.  

The 3iQ Solana Staking ETF will be eligible for registered accounts in Canada for a tax-efficient, long-term investment. 

Also, 3iQ expects that, for many investors, the costs and risks associated with buying, holding and selling the units of the Fund in the secondary market and the payment of the 3iQ Solana Staking ETF’s ongoing expenses will 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.

What is the benchmark for the 3iQ Solana Staking ETF?

The pricing index used in the 3iQ Solana Staking ETF is the CME CF Solana-Dollar Reference Rate – New York Variant. 

Why do I want to own Solana?

3iQ believes that Solana represents a compelling opportunity for investors seeking exposure to the SOL token and the daily price movements of the U.S. dollar price of SOL as well as the opportunity for long-term capital appreciation.  This investment objective is based, amongst other factors, on SOL’s  prioritizing on speed, scalability, and cost efficiency. Though Ethereum remains the most established Layer 1 cryptocurrency, supported by deep liquidity and a strong developer ecosystem, 3iQ believes that Solana’s efficiency and growth potential make it an attractive alternative, and that its low fees and high throughput make it an increasingly attractive foundational layer for the next generation of decentralized applications. 

3iQ believes in the basic economic theory of supply and demand. If demand for SOL as a means of exchange or a store of value, or its use as a network access payment solution continues to increase, then the price of SOL may increase. 3iQ believes that the adoption rate of the Solana network will continue to grow over the next decade leading to an increase in use cases for SOL, and therefore increased demand.

Is there a lock-up period for staked SOL, and what is the duration required for unstaking? How might these factors impact the ETF's performance during the initial days, weeks, and months of trading, and to what extent could they limit 3iQ's​ ability to stake the majority of the fund?

There is no defined lock-up period for staked SOL and assets can be unstaked at any time. However, there are entry and exit wait times involved in the staking process. The wait time for staking SOL takes 1 full epoch (approximately 2 days) while the wait time for unstaking also takes 1 full epoch. However, if there is a large increase in staking or unstaking activity, the bonding and unbonding periods may be longer than one epoch. However, managing the staking and unstaking processes are relatively simple and straightforward. Ethereum staking for example is inherently more complex than SOL staking, and 3iQ has operated ETH staking ETFs since 2023 without issue. 3iQ anticipates staking the ETF's SOL assets immediately after the ETF is launched. 3iQ's Solana Staking ETF should begin to accrue rewards approximately two days after its SOL assets are staked; therefore, the impact of staking should be reflected in the ETF's NAV within the first week of trading. Given the Solana network's current parameters, 3iQ does not anticipate difficulty in staking a majority of its assets indefinitely.  At the outset, 3iQ intends to adopt a measured approach to SOL staking, taking into account the liquidity needs of the ETF, the novelty SOL staking in an ETF and applicable regulatory requirements and approvals. 3iQ intends to initially target staking up to 50% of the SOL held in ETF.

What are the staking rewards in the 3iQ Solana Staking ETF?

3iQ intends to prioritize staking yields while retaining tax efficiency in SOLQ. A significant proportion of the rewards generated from staking are retained by the fund and reflected in its Net Asset Value (NAV). 3iQ intends to publish information relating to staking rewards generated by the ETF on its website at 3iQ.io. 

3iQ will receive a portion of the staking rewards generated for the 3iQ Solana Staking ETF (net of the fees payable to Coinbase) such that 60% of the rewards generated will accrue to the 3iQ Solana Staking ETF.

As of February 28, 2025, the average annualized percentage yield (APY) for staking SOL was approximately ~7.8%. Data sourced from: https://solanacompass.com/validators

How liquid is the Solana network?

Solana is one of the most liquid crypto assets on the market today and is the 6th largest by market cap. As of February 28, 2025, the 24h trading volume of the SOL token was approximately $7.3 billion USD, representing about ~10% of its circulating market cap of $72 billion USD.

Data sourced from: https://coinmarketcap.com/currencies/solana/

Why invest in the 3iQ Solana Staking ETF (SOLQ)?

01

3iQ Solana Staking ETF (SOLQ) launches with a 0% management fee for the first 12 months, making it among the most competitively priced digital asset ETFs available.

02

SOLQ will invest in long-term holdings of Solana (SOL) purchased from leading digital asset trading platforms and over-the-counter (OTC) counterparties, and will also provide investors with attractive staking rewards.

03

The 3iQ Solana Staking ETF offers a convenient and cost-effective way to indirectly invest in SOL.

04

The 3iQ Solana Staking ETF will be eligible for registered accounts in Canada for a tax-efficient, long-term investment.

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