# 21Shares Solana ETF

> Clarifo company profile — qualitative business description generated from
> the company's filings. Financial statements, charts and ratios are
> available on Clarifo (https://www.clarifo.com/en/companies/21Shares Solana ETF).

## Overview

21Shares Solana ETF is a U.S.-listed exchange-traded product structured as a trust that provides investors exposure to Solana (SOL) through publicly traded shares. The Trust issues and redeems shares in large “Baskets,” with proceeds from creations consisting of SOL that is held by custodians on behalf of the Trust. The shares trade on the Cboe BZX Exchange under the ticker TSOL (listed since November 18, 2025), allowing brokerage-based access to SOL price exposure without investors directly holding tokens. The Trust may stake a portion of its SOL (subject to sponsor determination and evolving tax guidance), which can generate additional SOL rewards and related tax considerations for shareholders.

## Products & services

• TSOL shares providing SOL exposure via a grantor trust
• In-kind creation/redemption via SOL “Baskets”
• Custodied SOL holdings backing outstanding shares
• Potential SOL staking program (sponsor-determined)
• Periodic cash distributions to help cover tax/expenses

- **Exchange-traded SOL exposure (TSOL shares)** (80%) — Publicly traded shares designed to reflect SOL exposure through a trust holding SOL.
- **Creation/redemption mechanism (Baskets funded in SOL)** (10%) — Primary-market issuance and redemption of shares in Baskets with deposits/withdrawals in SOL.
- **Staking-related activities (if implemented)** (10%) — Potential staking of a portion of SOL holdings to earn additional SOL rewards, subject to constraints and tax treatment.

- TSOL shares providing SOL exposure via a grantor trust
- In-kind creation/redemption via SOL “Baskets”
- Custodied SOL holdings backing outstanding shares
- Potential SOL staking program (sponsor-determined)
- Periodic cash distributions to help cover tax/expenses

## Customers

The Trust’s direct “customers” are investors who buy and sell TSOL shares on-exchange through broker-dealers, seeking liquid, regulated-market access to SOL exposure. A second key constituency is authorized participants/market makers that create and redeem Baskets, typically to arbitrage premiums/discounts and provide secondary-market liquidity. Institutional allocators may use TSOL for tactical crypto exposure, portfolio diversification, or operational simplicity versus self-custody. Retail investors may prefer TSOL for ease of access in traditional brokerage accounts and for avoiding direct wallet management, while still bearing SOL price and crypto-market risks. Shareholders also face tax outcomes tied to Trust activities (including potential staking rewards and SOL sales to pay expenses), which can influence investor suitability and demand.

- **Retail investors (brokerage accounts)** (primary) — Buy TSOL shares for simplified SOL exposure without managing wallets/keys, accepting SOL volatility and tax complexity.
- **Institutional investors and RIAs** (primary) — Use TSOL for portfolio allocation, liquidity, and operationally simpler access versus direct token custody.
- **Authorized participants and market makers** (secondary) — Create/redeem SOL-funded Baskets and provide liquidity, helping align market price with NAV.

- Retail brokerage investors seeking SOL exposure without self-custody
- Institutional allocators using TSOL for liquid crypto allocation
- Registered investment advisers implementing client crypto sleeves
- Authorized participants creating/redeeming Baskets to manage spreads
- Market makers providing continuous liquidity on Cboe BZX (TSOL)

## Geography

The Trust is U.S.-listed and its shares trade on the Cboe BZX Exchange, making the United States the primary market for distribution and trading access. The Trust Agreement specifies Delaware state courts and federal courts in Wilmington, Delaware as the exclusive jurisdiction for certain claims, anchoring key legal venue to Delaware. Operationally, the Trust’s exposure is to the global SOL market because SOL trades continuously across global crypto venues, which can affect pricing, liquidity, and volatility outside U.S. market hours. Custody and service providers (custodians, sponsor, and other agents) are central to operations, but the provided excerpts do not disclose a geographic revenue split or detailed operating footprint beyond the U.S. listing and Delaware jurisdiction.

- Listed in the United States on Cboe BZX (ticker: TSOL)
- Delaware/Wilmington courts specified for certain Trust disputes
- Economic exposure driven by global SOL market pricing and liquidity
- Trading and NAV dynamics influenced by 24/7 crypto market hours

## Strategy

The Trust’s strategy is to maintain a straightforward, rules-based exposure to SOL by holding SOL in custody and limiting activities consistent with grantor trust constraints. A core priority is supporting efficient primary-market creations/redemptions funded in SOL so secondary-market trading can track underlying value and remain liquid. The sponsor’s decision on whether and how to implement SOL staking is a strategic lever that could enhance returns but increases operational, regulatory, and tax complexity. Another priority is managing tax and reporting outcomes for shareholders, including the timing of distributions and the handling of SOL sales to pay expenses. Ongoing compliance with SEC disclosure requirements and exchange listing standards underpins investor access and market confidence.

- **Support liquid secondary-market trading via Basket mechanics** (short-term) — Efficient creations/redemptions help keep TSOL price aligned with underlying SOL and reduce premiums/discounts.
- **Implement staking only within acceptable tax and trust constraints** (medium-term) — Staking may improve returns but could jeopardize grantor trust status or create adverse shareholder tax outcomes.

- Maintain SOL-backed structure consistent with grantor trust limits
- Enable efficient SOL in-kind Basket creation/redemption for liquidity
- Evaluate staking to potentially add SOL rewards vs added complexity
- Manage expenses via SOL sales while minimizing tracking friction
- Maintain compliance with SEC reporting and Cboe BZX listing rules

## Risks

The Trust’s primary economic risk is SOL price volatility, which directly drives the value of TSOL shares and can lead to sharp drawdowns. The excerpts highlight material tax and structural risks: staking and other activities could cause the Trust to lose grantor trust status, potentially triggering partnership (K-1) reporting or even corporate-level taxation, which would likely reduce shareholder returns. Shareholders may also incur taxable income (including ordinary income from staking rewards) without receiving matching cash distributions, creating liquidity-driven selling pressure. Like other crypto-linked ETPs, the Trust is exposed to custody, operational, and market-structure risks (e.g., forks, network incidents, liquidity disruptions) that can impair NAV tracking or redemption processes. The Trust Agreement’s exclusive jurisdiction and jury trial waiver provisions can limit shareholder legal forum options for certain disputes.

- **Loss of grantor trust status due to staking/activities** [high] — If activities are viewed as impermissible for grantor trust treatment, the Trust could be reclassified as a partnership or corporation, changing tax reporting and potentially imposing entity-level tax.
- **Adverse shareholder tax outcomes from staking and SOL sales** [high] — Staking rewards are expected to be ordinary income and SOL may be sold to pay expenses; shareholders may owe taxes even without sufficient cash distributions.
- **Exclusive jurisdiction and jury trial waiver provisions** [medium] — Trust Agreement provisions may limit shareholders’ ability to choose forum or obtain a favorable judicial venue for certain claims.

- Grantor trust status could be lost due to staking/activity interpretation
- Reclassification could trigger K-1s or corporate tax, reducing returns
- Tax liabilities may arise without matching cash distributions
- SOL staking rewards expected as ordinary income, timing mismatch risk
- Custody/operational failures could impair SOL safeguarding or NAV
- SOL market volatility and liquidity shocks can drive large drawdowns
- Exclusive Delaware jurisdiction clauses may limit shareholder remedies

## Accounting

As a trust holding SOL, the most decision-relevant accounting area is how SOL holdings and any staking rewards flow through taxable income and shareholder reporting, rather than operating revenue. The Trust expects shareholders to include their proportionate share of taxable income and expenses, including gains/losses from SOL used or sold to pay expenses or facilitate redemptions, which can create timing differences versus cash distributions. If staking is undertaken, rewards received as additional SOL are expected to be treated as ordinary income for U.S. federal income tax purposes, increasing reported taxable income even when no cash is distributed. A critical structural accounting/tax consideration is classification: losing grantor trust status could shift reporting to partnership (K-1) or corporate taxation, materially changing after-tax economics and investor reporting complexity. Investors should also expect quarter-to-quarter variability in reported results driven by SOL price moves, creations/redemptions, and any SOL dispositions for fees and expenses.

- **Grantor trust vs partnership/corporation classification** — Could change shareholder reporting regime and impose entity-level tax
- **Tax treatment and recognition timing of staking rewards** — Higher taxable income and potential mismatch vs cash distributions

- Taxable income allocated to shareholders (grantor trust mechanics)
- SOL sales to pay expenses can realize gains/losses for investors
- Staking rewards in SOL expected as ordinary income for tax purposes
- Potential reclassification to partnership/corporation changes reporting
- Distributions may not match timing/amount of taxable income

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*Last updated: 2026-08-11T04:46:16.745421+00:00*