A16z Crypto, the blockchain investment arm of venture capital firm Andreessen Horowitz, has invested $50 million in Jito, the liquid staking protocol that powers the Solana network.
According to a Thursday report in Fortune, the deal will see a16z granted a private allocation of Jito’s native tokens at a discounted rate.
Brian Smith, executive director of the Jito Foundation, told Cointelegraph that the Jito Foundation has a “very long time horizon” and that this investment “allows the foundation to work towards making Solana the home of internet capital markets for the next 10 years.”
Jito is a Solana-based liquid staking protocol launched in 2022 that allows users to stake SOL tokens and earn rewards while maintaining liquidity through the token JitoSOL. The Jito Foundation will oversee the protocol’s governance and token distribution, and Jito Labs will serve as its core developer and infrastructure provider.
Andreessen Horowitz (a16z) is a Silicon Valley venture capital firm known for backing cutting-edge technology and cryptocurrency startups. A16z Crypto, a blockchain-focused division, invests in Web3 infrastructure, decentralized finance, and blockchain technology.
The transaction follows a16z’s purchase of $55 million in tokens in LayerZero, a Canadian-based cross-chain messaging protocol, on April 17th. That same month, the company led a $25 million investment round in Miden, a blockchain powered by Polygon Labs’ zero-knowledge (ZK) proofs.
Related: SEC Staff’s Guidance on Liquid Staking Leaves Regulatory Questions, Possible Challenges
US regulators discuss liquid staking
Liquid staking, the process by which users can stake tokens to secure a proof-of-stake blockchain and earn yield while receiving tradeable derivative tokens, has been at the center of US regulatory discussions this year, and Jito Labs is playing a role in driving that discussion forward.
Rebecca Rettig, chief legal officer at Jito Labs, led the team in the initial talks with the Trump administration. Smith said her efforts to secure clearer guidance on liquid staking paves the way for JitoSOL’s inclusion in ETFs and ETPs, which is “an important part of JTO’s bullish thesis.”
On July 31, Jito Labs joined asset managers VanEck and Bitwise in asking the SEC to allow liquidity staking within eight proposed Solana exchange-traded products (ETPs). The group said liquid staking tokens offer a more capital-efficient and resilient way to incorporate staking into ETP structures.
Roughly a week later, on August 5, the SEC’s Division of Corporation Finance issued guidance clarifying that some forms of liquidity staking do not constitute an offering of securities, although “depending on the facts and circumstances.”
Although many in the cryptocurrency and DeFi communities saw this statement as a positive development, not all SEC officials shared this sentiment. Commissioner Caroline Crenshaw criticized the guidance as “murky” and urged liquid staking providers to proceed with caution.
Despite continued regulatory uncertainty, liquid staking protocols have become core components of the decentralized finance ecosystem.
According to data from DefiLlama, Jito’s liquid staking protocol currently has approximately $2.8 billion in total value locked (TVL), compared to $1.9 billion for Solana competitor Marinade and approximately $33.9 billion for Lido, Ethereum’s leading liquid staking platform.
In July, crypto fintech platform MoonPay entered the picture and announced the launch of the Solana Liquid Staking program, which offers users up to 8.49% annual yield on their SOL holdings.
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