10-K: Grayscale Solana Staking ETF Reports 2025 Performance Amid Market Volatility

Grayscale Solana Staking ETF's 2025 annual report reveals a net decrease in assets from operations due to SOL price depreciation, despite successful NYSE Arca uplisting and staking initiation.

Summary

• The Trust officially changed its name to Grayscale Solana Staking ETF on January 5, 2026, having previously been Grayscale Solana Trust ETF since October 28, 2025.
• Shares of the Trust (GSOL) commenced trading on NYSE Arca on October 29, 2025, following SEC approval of generic listing standards for commodity-based exchange-traded products.
• The Trust initiated staking of its Solana (SOL) holdings on October 6, 2025, to generate staking rewards, with a portion of these rewards allocated to the Custodian, Staking Provider, and Sponsor.
• The Sponsor's Fee was significantly reduced from 2.5% to 0.35% annually, effective October 29, 2025.
• A fee waiver period for the Sponsor's Fee was in effect from November 5, 2025, until February 5, 2026, or until the Trust's Net Asset Value (NAV) exceeded $1.0 billion. No Sponsor's Fee was incurred during this period as the NAV did not reach $1.0 billion.
• Net assets increased by 56% to $160,357,000 at December 31, 2025, from $102,631,000 at December 31, 2024.
• The Trust experienced a net decrease in net assets resulting from operations of ($49,327,000) for the year ended December 31, 2025, primarily driven by a net realized and unrealized loss on investment in SOL of ($48,914,000).
• The price of SOL depreciated from $193.69 per SOL at December 31, 2024, to $123.97 per SOL at December 31, 2025.
• The Trust received approximately 763,741 SOL, valued at $107,053,000, from new Share creations and 11,419 SOL, valued at $1,611,000, from staking rewards in 2025.
• Approximately 10,943 SOL were redeemed to cover the Sponsor's Fee, and 569 SOL were payable for the Sponsor's Staking Fee.
• Currently, the Trust exclusively processes creations and redemptions of Shares through cash orders, with in-kind transactions not yet available.
• The Trust adopted a 'Recovery of Erroneously Awarded Compensation Policy' to comply with SEC Rule 10D-1 and NYSE Arca Rule 5.3-E(p).

Sentiment

Score: 4

Explanation: StockSavvy.ai views this as a mixed filing. While the uplisting to NYSE Arca and reduced fees are positive steps for market integration and competitiveness, the significant depreciation in SOL price and the resulting net decrease in operational assets for 2025 indicate underlying asset performance challenges.

Positives

• Uplisting of Shares to NYSE Arca on October 29, 2025, under the ticker GSOL, enhancing market accessibility and improving arbitrage efficiency, leading to a tighter premium/discount to NAV.
• Commencement of SOL staking on October 6, 2025, enabling the Trust to earn additional SOL as Staking Consideration, diversifying its revenue streams.
• Significant reduction of the Sponsor's Fee from 2.5% to 0.35% annually, effective October 29, 2025, making the product more competitive in the market.
• Implementation of a fee waiver period for the Sponsor's Fee from November 5, 2025, to February 5, 2026, providing temporary cost relief to the Trust.
• Net assets increased by 56% to $160,357,000 at December 31, 2025, primarily due to substantial new share creations, indicating investor interest.
• The Trust has begun to meet its investment objective more closely following the NYSE Arca uplisting, with average premiums of 0.12% and average discounts of 0.12% to NAV, a significant improvement from substantial premiums and discounts experienced on OTCQX.

Negatives

• A net decrease in net assets resulting from operations of ($49,327,000) for the year ended December 31, 2025, primarily due to SOL price depreciation.
• Significant depreciation in SOL's market price from $193.69 per SOL at December 31, 2024, to $123.97 per SOL at December 31, 2025.
• The Trust currently only permits cash orders for creations and redemptions, not in-kind transactions, which could hinder the efficiency of the arbitrage mechanism and potentially lead to Shares trading at premiums or discounts.
• Shareholders will not receive benefits from any forks or airdrops of SOL, as the Trust irrevocably abandons all Incidental Rights and IR Virtual Currency.
• Beneficial owners of Shares could incur U.S. federal income tax liabilities from staking rewards without receiving corresponding cash distributions from the Trust.

Risks

• Extreme volatility of SOL trading prices could lead to a material adverse effect on the value of the Shares, potentially resulting in a loss of all or substantially all of their value.
• The medium-to-long term value of Shares is subject to factors related to the capabilities and development of blockchain technologies, including potential flaws in the Solana protocol or cryptography.
• The digital asset industry is relatively new and rapidly evolving, and the value of Shares depends on the acceptance and utility of SOL.
• Concentrated ownership of SOL (top 100 wallets hold approximately 29%) could lead to adverse effects on the market price from large sales or distributions by these holders.
• Temporary or permanent forks or clones of the Solana Network could adversely affect the value of the Shares or the Trust's ability to operate.
• Recent extreme volatility and disruption in digital asset markets (e.g., FTX, Celsius, Voyager failures) have led to a loss of confidence and market-wide declines in liquidity.
• The largely unregulated nature and lack of transparency surrounding Digital Asset Trading Platforms may expose them to fraud, market manipulation, business failures, security failures, or operational problems.
• Digital Asset Trading Platforms may be susceptible to front-running and wash-trading, which could distort SOL prices and negatively affect market perception.
• The Index used to calculate SOL's price has a limited history, and its failure or volatility could adversely affect the value of the Shares.
• Competition from the emergence or growth of other digital assets (e.g., Ethereum, Avalanche, Cardano) and central bank digital currencies (CBDCs) could negatively impact the demand for, and price of, SOL.
• Congestion or delays on the Solana Network may delay purchases or sales of SOL by the Trust, affecting liquidity and confidence.
• The Trust relies on third-party service providers (Custodial Entities, Authorized Participants, Liquidity Providers), and disruptions, insolvencies, or replacements of these providers could adversely impact the Trust's operations and asset safekeeping.
• Shares may trade at a premium or discount to the Trust's NAV per Share due to non-concurrent trading hours between NYSE Arca and the 24-hour Digital Asset Trading Platform Market.
• Any suspension or unavailability of the Trust's redemption program may cause the Shares to trade at a discount to the NAV per Share.
• The amount of the Trust's assets represented by each Share will decline over time as the Trust pays the Sponsor's Fee and Additional Trust Expenses.
• Security threats to the Trust's Vault Balance or Settlement Balance could result in the halting of Trust operations and a loss of Trust assets.
• SOL transactions are irrevocable, and stolen or incorrectly transferred SOL may be irretrievable, leading to potential losses for the Trust.
• The lack of full insurance coverage for the Trust's SOL and limited rights of legal recourse against service providers expose the Trust and its shareholders to the risk of loss.
• The Trust may be required, or the Sponsor may deem it appropriate, to terminate and liquidate at a time that is disadvantageous to shareholders.
• The Trust Agreement limits shareholders' voting rights and restricts their right to bring a derivative action, concentrating control with the Sponsor.
• The Sponsor is solely responsible for determining the NAV and NAV per Share, and any errors or changes in these calculations could adversely affect Share value.
• Extraordinary expenses resulting from unanticipated events (e.g., taxes, litigation) may become payable by the Trust, adversely affecting Share value.
• Shareholders could incur tax liabilities without receiving corresponding distributions from the Trust, particularly from staking rewards.
• Staking introduces risks of SOL loss due to slashing penalties, inaccessibility of staked SOL during activation/deactivation periods, and dependence on third-party staking providers.
• The regulatory landscape surrounding staking is uncertain, potentially exposing the Trust and its shareholders to unforeseen regulatory risks or enforcement actions.
• Coinbase Global serving as custodian and prime execution agent for several competing SOL products could lead to conflicts of interest or inadequate support for the Trust.
• Authorized Participants serving competing SOL products could adversely affect the arbitrage mechanism and the Trust's operations.
• The Sponsor may implement amendments to the Trust Agreement that may not align with shareholder interests or could increase risks to the Trust's intended tax treatment.
• A determination that SOL or any other digital asset is a security could adversely affect the value of SOL and the Shares, potentially leading to extraordinary expenses or Trust termination.
• Regulatory changes or actions by U.S. Congress or federal/state agencies may restrict SOL use or validating activity, adversely affecting Share value.
• If regulators subject an Authorized Participant, the Trust, or the Sponsor to regulation as a money service business or money transmitter, it could result in extraordinary expenses and decreased liquidity.
• The treatment of the Trust for U.S. federal income tax purposes is uncertain, and future guidance could adversely affect Share value.
• U.S. tax-exempt shareholders may recognize unrelated business taxable income (UBTI) from staking activities.
• Non-U.S. Holders may be subject to withholding tax on staking rewards and income from forks/airdrops.
• Potential conflicts of interest may arise among the Sponsor or its affiliates and the Trust, as the Sponsor may favor its own interests.
• DCG's minority interest in Kraken, an Index constituent, could raise concerns about potential influence on market data.
• The lack of independent advisers representing investors in the Trust means investors should consult their own legal, tax, and financial advisers.
• As an emerging growth company, the Trust's reduced disclosure requirements may make the Shares less attractive to some investors.

Future Outlook

The Trust's investment objective remains to reflect the value of SOL held, including staking rewards, less expenses. The Sponsor plans to continue staking as much of the Trust's SOL as feasible (up to 100%), while maintaining a 'Liquidity Sleeve' of unstaked SOL to meet redemption requests. Future Solana protocol upgrades may introduce automated slashing mechanisms. The Sponsor may also explore additional financing arrangements to manage SOL liquidity. The SEC's ongoing 'crypto task force' and 'Project Crypto' initiatives aim to establish a clear regulatory framework for digital assets, which could significantly influence the industry's future landscape.

Management Comments

• "The Sponsor has observed that the Trust has begun to meet its investment objective more closely following the uplisting of the Shares to NYSE Arca."
• "The Sponsor generally seeks to stake as much of the Trusts SOL as is practicable (i.e., up to 100%) at all times, with the remainder of the Trusts SOL remaining unstaked in order to address the various exceptions and other considerations described herein."
• "The Sponsor believes that market practice for Provider-Facilitated Staking arrangements has largely become standardized, with little variation in terms, and therefore, the Sponsor anticipates that the Trust to change Staking Providers frequently, if at all."
• "The Sponsor does not anticipate that the Staking Provider, which is expected to be an institution of recognized and trusted standing in the digital asset marketplace, with whom the Sponsor has had extensive prior interaction, will commit any slash-worthy offenses in the conduct of the Provider-Facilitated Staking activities."
• "The Sponsor believes that the security procedures in place for the Trust... are reasonably designed to safeguard the Trusts SOL."
• "The Sponsor believes that momentum pricing of SOL has resulted, and may continue to result, in speculation regarding future appreciation in the value of SOL, inflating and making the Index Price more volatile."
• "The Sponsor believes that the Trust is not a commodity pool for purposes of the CEA, and that neither the Sponsor nor the Trustee is subject to regulation by the CFTC as a commodity pool operator or a commodity trading adviser in connection with the operation of the Trust."
• "The Sponsor intends to take the position that the Trust is properly treated as a grantor trust for U.S. federal income tax purposes."
• "The Sponsor believes that it is applying the proper legal standards in determining that SOL is not a security in light of the uncertainties inherent in the Howey and Reves tests."

Industry Context

StockSavvy.ai notes that the digital asset market experienced significant volatility and disruption in 2022 and 2023, marked by events such as the FTX collapse and insolvencies of major lenders like Celsius and Voyager Digital. This period led to increased regulatory scrutiny, with the SEC initiating enforcement actions against prominent platforms like Binance, Coinbase, and Kraken, although these complaints were dismissed between February and May 2025. The U.S. government, under President Trump's executive order, is actively working on a comprehensive regulatory framework for digital assets, including the establishment of a Strategic Bitcoin Reserve and a U.S. Digital Asset Stockpile, which could influence market dynamics. The emergence of central bank digital currencies (CBDCs) and new payment initiatives from traditional financial institutions also pose competitive challenges to existing digital assets like SOL. The Solana Network itself operates in a competitive landscape against other smart contract platforms such as Ethereum, Avalanche, and Cardano.

Comparison to Industry Standards

• The Trust's Sponsor's Fee of 0.35% is positioned as a competitive factor within the digital asset ETP market.
• The Trust differentiates itself by utilizing Coinbase Custody Trust Company, LLC for cold storage of private keys, employing geographically distributed secure vaults, and implementing enhanced security procedures including multiple encrypted private key shards and 2-step verification.
• The Solana Network's Proof-of-History (PoH) timestamping mechanism is highlighted as providing a transaction processing speed and capacity advantage over other blockchain networks like Bitcoin and Ethereum.
• The Solana Network's proof-of-stake consensus mechanism is considered more energy-efficient and scalable compared to Bitcoin's proof-of-work model.
• The Index Provider's methodology for selecting constituent trading platforms for the Index aligns with the International Organization of Securities Commissions (IOSCO) Principles for Financial Benchmarks.
• The Trust's staking arrangements are designed to prevent pooling of SOL with other holders, distinguishing it from some digital asset firms, and the staking provider's compensation is based on a percentage of gross staking consideration rather than staked SOL.
• The Custodian's insurance coverage is noted as commercially reasonable, but Coinbase Global's public filings indicate that the total value of crypto assets in its possession significantly exceeds its insurance coverage, a common risk disclosure across the digital asset custody industry.

Management Changes

Corporate Governance

Legal Proceedings

• Genesis Global Capital, LLC and Genesis Asia Pacific Pte. Ltd. filed a complaint on May 19, 2025, in the SDNY Bankruptcy Court against Digital Currency Group, Inc. (DCG) and certain affiliates, including Grayscale Operating, LLC (a former co-sponsor), alleging preferential transfers of 105 Bitcoin and 37,647.06 Ethereum Classic tokens. Grayscale Operating, LLC intends to vigorously defend against this lawsuit.
• Digital Currency Group, Inc. (DCG) agreed to a cease-and-desist order and paid a $38 million civil money penalty on January 17, 2025, stemming from SEC allegations that DCG negligently misled investors about Genesis Capital's financial condition.
• The SEC brought charges against Binance, Coinbase, Inc., and Kraken in June and November 2023, respectively, alleging they operated unregistered securities exchanges. These complaints were dismissed between February 2025 and May 2025 through court-approved joint stipulations.
• In July 2023, the District Court for the Southern District of New York ruled that while XRP is not a security, certain sales of XRP to specific buyers constituted investment contracts. Appeals in this case were dismissed on August 7, 2025.

Related Party Transactions

• Digital Currency Group, Inc. (DCG), the indirect parent company of the Sponsor, holds a minority interest of less than 1.0% in Kraken, one of the Digital Asset Trading Platforms included in the Index.
• Grayscale Securities, LLC, an affiliate of the Sponsor, served as the Authorized Participant for the Trust from October 3, 2022, through October 28, 2025.
• The Sponsor and its affiliates manage several other digital asset investment vehicles, potentially creating conflicts of interest in resource allocation.
• Several employees of the Sponsor and DCG are FINRA-registered representatives.
• Jane Street Capital, LLC, an Authorized Participant, is an affiliate of JSCT, LLC, one of the Liquidity Providers.
• Virtu Americas LLC, an Authorized Participant, is an affiliate of Virtu Financial Singapore Pte. Ltd., one of the Liquidity Providers.
• The Sponsor has historically selected, and may continue to select, CoinDesk Indices, Inc. (the Index Provider), which is an affiliate of the Sponsor and the Trust, to provide the Index Price.
• Coinbase Custody Trust Company, LLC (Custodian) and Coinbase, Inc. (Prime Broker) are affiliates of Coinbase Global, Inc., which also serves as custodian and prime execution agent for several competing exchange-traded SOL products.

Stakeholder Impact

• **Shareholders**: Directly impacted by the volatility of SOL's price, the Trust's expenses, and the potential for Shares to trade at premiums or discounts to NAV. They benefit from reduced Sponsor's Fees and potential staking rewards but face risks from limited voting rights, restrictions on derivative actions, and potential tax liabilities from staking rewards without corresponding cash distributions.
• **Authorized Participants**: Their ability to efficiently create and redeem Baskets, currently only through cash orders, is crucial for maintaining market liquidity and the effectiveness of the arbitrage mechanism. Their engagement with competing products could affect the Trust.
• **Sponsor (Grayscale Investments Sponsors, LLC)**: Responsible for the Trust's management and administration, earning fees from the Trust. Faces potential conflicts of interest due to its broader portfolio of digital asset investments and affiliated service providers.
• **Custodial Entities (Coinbase Custody Trust Company, LLC, Anchorage Digital Bank N.A., Coinbase, Inc.)**: Essential for the secure safekeeping of the Trust's SOL. Their operational integrity, security protocols, and insurance coverage are critical for protecting Trust assets.
• **Solana Network Community (Developers, Users, Validators)**: The health, security, and continued development of the underlying Solana Network are fundamental to the value of SOL and, consequently, the Trust's Shares. Any issues with network stability, scalability, or governance could have a significant impact.

Next Steps

• The Sponsor will continue to manage the Trust's SOL staking activities, including maintaining a 'Liquidity Sleeve' of unstaked SOL to address redemption requests.
• The Sponsor may, in the future, modify the form of staking in which the Trust engages, provided the 'Staking Condition' is satisfied.
• The Sponsor may explore other financing arrangements or mechanisms to manage SOL liquidity constraints, if necessary.
• Future protocol upgrades for the Solana Network may include the implementation of automated slashing mechanisms.
• The SEC's 'crypto task force' and 'Project Crypto' initiatives will continue to work on developing a comprehensive regulatory framework for digital assets.
• The Sponsor will provide updates on any material changes to the Index calculation methodology or constituent trading venues in the Trust's quarterly reports on Form 10-Q.

Key Dates

Recommendation

The Trust has made positive strides in market integration with its NYSE Arca listing and reduced fees, which should improve arbitrage efficiency and competitiveness. The commencement of staking also offers a new revenue stream. However, the significant depreciation in SOL's price during 2025, coupled with the inherent volatility and regulatory uncertainties of the digital asset market, presents considerable risks. The current reliance on cash-only creations/redemptions also limits arbitrage effectiveness. A 'Hold' recommendation is appropriate as investors should monitor SOL's price performance and regulatory developments closely before making further investment decisions.

Keywords

Grayscale Solana Staking ETF, GSOL, Solana, SOL, Digital Asset, Cryptocurrency, ETF, Staking, SEC Filing, 10-K, Financial Report, Investment, Blockchain, Proof-of-Stake, NYSE Arca, Coinbase Custody, Digital Currency Group, Grayscale Investments