A16z Crypto, the blockchain investment branch of venture capital firm Andreessen Horowitz, has invested $50 million in Jito, a liquid staking protocol that supports the Solana network.
The agreement will provide a16z with an undisclosed allocation of Jito’s native tokens at a reduced price, as reported by Fortune on Thursday.
Brian Smith, executive director of the Jito Foundation, informed Cointelegraph that the Jito Foundation has “an exceptionally long time horizon,” and this investment “will enable the Foundation to establish Solana as the destination for internet capital markets well into the upcoming decade.”
Jito is a Solana-based liquid staking protocol launched in 2022 that allows users to stake SOL tokens to earn rewards while maintaining liquidity through its token, JitoSOL. The Jito Foundation manages the protocol’s governance and token distribution, while Jito Labs acts as its primary developer and infrastructure provider.
Andreessen Horowitz (a16z) is a Silicon Valley venture capital firm recognized for supporting leading technology and crypto startups. Its blockchain-focused division, a16z Crypto, invests in Web3 infrastructure, decentralized finance, and blockchain technologies.
This deal follows a $55 million token purchase by a16z in LayerZero, a Canada-based crosschain messaging protocol, completed on April 17. In the same month, the firm led a $25 million investment round into Miden, a zero-knowledge (ZK) proof-powered blockchain from Polygon Labs.
Related: SEC staff liquid-staking guidance leaves regulatory questions, could be contested
US regulators debate liquid staking
Liquid staking, a process enabling users to stake tokens to secure a proof-of-stake blockchain and earn yield while obtaining a tradable derivative token, has been a focal point of regulatory discussions in the United States this year, with Jito Labs contributing to the dialogue.
Rebecca Rettig, chief legal officer at Jito Labs, led the inaugural team to engage with the Trump administration. Smith noted that her efforts in securing clearer guidance around liquid staking facilitates the inclusion of JitoSOL in ETFs and ETPs — a “key aspect of the bull thesis for JTO.”
On July 31, Jito Labs, along with asset managers VanEck and Bitwise, urged the SEC to permit liquid staking in eight proposed Solana exchange-traded products (ETPs). The coalition asserted that liquid staking tokens offer a more capital-efficient and resilient method to integrate staking into ETP structures.
About a week later, on Aug. 5, the SEC’s Division of Corporate Finance issued guidance clarifying that certain forms of liquid staking do not qualify as securities offerings, although this determination depends “on the facts and circumstances.”
While numerous crypto and DeFi communities viewed this statement as a positive advancement, not all SEC officials agreed. Commissioner Caroline Crenshaw criticized the guidance, stating that it “muddies the waters” and urged liquid staking providers to proceed cautiously.
Despite the ongoing regulatory ambiguity, liquid staking protocols have become integral to the decentralized finance ecosystem.
According to data from DefiLlama, Jito’s liquid staking protocol currently commands approximately $2.8 billion in total value locked (TVL), compared to $1.9 billion for Solana rival Marinade and approximately $33.9 billion for Lido, Ethereum’s top liquid staking platform.
In July, the crypto fintech company MoonPay entered the sector, announcing the launch of a Solana liquid staking initiative offering users an annual yield of up to 8.49% on their SOL holdings.
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