A16z Crypto, the blockchain investment division of venture capital firm Andreessen Horowitz, has allocated $50 million to Jito, a liquid staking protocol supporting the Solana network.
This investment will provide a16z with an undisclosed number of Jito’s native tokens at a reduced rate, as reported by Fortune on Thursday.
Brian Smith, executive director of the Jito Foundation, shared with Cointelegraph that the Foundation has “an exceptionally long time horizon,” and this investment “will enable the Foundation to position Solana as the hub for internet capital markets into the next decade.”
Jito is a liquid staking protocol on the Solana platform launched in 2022, allowing users to stake SOL tokens for rewards while maintaining liquidity through its token, JitoSOL. The Jito Foundation manages the protocol’s governance and token distribution, with Jito Labs serving as its main developer and infrastructure provider.
Andreessen Horowitz (a16z) is a prominent Silicon Valley venture capital firm that supports leading technology and crypto startups. Its blockchain-focused branch, a16z Crypto, invests in Web3 infrastructure, decentralized finance, and blockchain technologies.
This investment follows a $55 million token acquisition by a16z in LayerZero, a Canadian crosschain messaging protocol, completed on April 17. The same month, the firm led a $25 million investment round in Miden, a zero-knowledge (ZK) proof-based blockchain from Polygon Labs.
Related: SEC staff liquid-staking guidance raises regulatory concerns, may be contested
US regulators consider liquid staking
Liquid staking—a mechanism that enables users to stake tokens to secure a proof-of-stake blockchain while earning yield and receiving a tradable derivative token—has sparked regulatory discussions in the United States this year, with Jito Labs actively contributing to the dialogue.
Rebecca Rettig, chief legal officer at Jito Labs, was the first to meet with the Trump administration on this issue. Smith noted that her efforts in seeking clearer guidelines around liquid staking could pave the way for JitoSOL’s inclusion in ETFs and ETPs, a crucial element of the bull thesis for JTO.
On July 31, Jito Labs collaborated with asset managers VanEck and Bitwise in urging the SEC to approve liquid staking for eight proposed Solana exchange-traded products (ETPs). The group asserted that liquid staking tokens offer a more capital-efficient and resilient method to integrate staking into ETP structures.
A week later, on Aug. 5, the SEC’s Division of Corporate Finance released guidance indicating that certain forms of liquid staking do not qualify as securities offerings, although this assessment depends on “the facts and circumstances.”
While many in the crypto and DeFi communities viewed this statement as a positive sign, not all SEC officials were in agreement. Commissioner Caroline Crenshaw criticized the guidance, claiming it “creates confusion” and urged liquid staking providers to proceed cautiously.
Despite the ongoing regulatory ambivalence, liquid staking protocols have emerged as integral components of the decentralized finance landscape.
Data from DefiLlama indicates that Jito’s liquid staking protocol currently has approximately $2.8 billion in total value locked (TVL), compared to around $1.9 billion for Marinade, its competitor on Solana, and roughly $33.9 billion for Lido, Ethereum’s top liquid staking platform.
In July, crypto fintech company MoonPay entered the market with a Solana liquid staking program that offers users an annual yield of up to 8.49% on their SOL holdings.
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