The investment deepens a16z’s exposure to Solana’s liquid staking ecosystem as US regulators begin clarifying how such products fit into securities law.
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A16z Crypto, the blockchain investment arm of venture capital firm Andreessen Horowitz, has invested $50 million in Jito, a liquid staking protocol that underpins the Solana network.
The deal will grant a16z an undisclosed allotment of Jito’s native tokens at a discounted rate, according to a Fortune report Thursday.
Brian Smith, executive director of the Jito Foundation, told Cointelegraph that the Jito Foundation has “an exceptionally long time horizon,” and the investment “will allow the Foundation to work to make Solana the home for internet capital markets well into the next decade.”
Jito is a Solana-based liquid staking protocol in 2022 that lets users stake SOL tokens to earn rewards while retaining liquidity through its token, JitoSOL. The Jito Foundation oversees the protocol’s governance and token distribution, while Jito Labs serves as its core developer and infrastructure provider.
Andreessen Horowitz (a16z) is a Silicon Valley venture capital firm known for backing leading technology and crypto startups. Its blockchain-focused arm, a16z C, invests in Web3 infrastructure, decentralized finance and blockchain technologies.
The deal follows a in LayerZero, a Canada-based crosschain messaging protocol, made on April 17. The same month, the firm into Miden, a zero-knowledge (ZK) proof-powered blockchain from Polygon Labs.
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Liquid staking, a process that allows users to stake tokens to secure a proof-of-stake blockchain and earn yield while receiving a tradable derivative token, has been at the center of regulatory debate in the United States this year, and Jito Labs has played a role in pushing the conversation.
Rebecca Rettig, chief legal officer at Jito Labs, led the first team to meet with the Trump administration. Smith said her work on securing clearer guidance around liquid staking paves the way for — a “key part of the bull thesis for JTO.”
On July 31, Jito Labs joined asset managers VanEck and Bitwise in within eight proposed Solana exchange-traded products (ETPs). The group liquid staking tokens provide a more capital-efficient and resilient way to incorporate staking into ETP structures.
Roughly a week later, on Aug. 5, the SEC’s Division of Corporate Finance guidance clarifying that some forms of liquid staking do not constitute securities offerings, although it depends “on the facts and circumstances.”
While many viewed the statement as a positive development, not all SEC officials shared the sentiment. Commissioner Caroline Crenshaw , saying it “muddies the waters” and urged liquid staking providers to move forward carefully.
Despite ongoing regulatory uncertainty, liquid staking protocols have become a core component of the decentralized finance ecosystem.
According to data from DefiLlama, Jito’s liquid staking protocol currently holds about $2.8 in total value locked (TVL), compared with $1.9 for Solana competitor Marinade and roughly $33.9 for Lido, Ethereum’s leading liquid staking platform.
In July, crypto fintech platform MoonPay entered the ring, announcing the launch of a offering users an annual yield of up to 8.49% on their SOL holdings.
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