a16z Invests $50M In Solana Liquid Staking Protocol Jito

a16z crypto, the blockchain investment arm of venture capital firm Andreessen Horowitz, has invested $50 million into Jito, a liquid stalking protocol that underpins the Solana network. 

The investment values the project at around $800 million, with the crypto fund receiving JTO tokens in return. The deal is one of the most significant late-stage financial deals for the Solana ecosystem. 

a16z Makes Jito Investment 

a16z has announced a $50 million investment in liquid staking protocol Jito. In return, a16z will receive an undisclosed amount of JTO tokens at a discounted rate. The deal is being viewed as one of the most significant late-stage financing deals in the Solana ecosystem. Brian Smith, the executive director of the Jito Foundation, stated that the deal signifies long-term alignment between Andreessen Horowitz and the protocol. Smith also added that this was the largest commitment from an investor to Jito. Smith stated, 

“If you’re accepting long-term alignment where you can’t sell for a while, then there’s traditionally some modest discount associated with that.”

He also added that the investment will allow the foundation to make Solana the home of internet capital markets. 

Andreessen Horowitz is one of the most prominent investors in the cryptocurrency ecosystem and has made significant investments in several key projects. Major investments include a $55 million deal for cryptocurrency from LayerZero, and a $70 million deal for tokens from EigenLayer. The investments are made through the firm’s blockchain-focused arm, a16z Crypto. 

Regulators Debating Liquid Staking 

Liquid staking allows users to stake tokens to a secure Proof-of-Stake blockchain and earn yield while receiving a tradable derivative token. It has been a hotly debated subject in the US, with Jito playing a key role in ensuring the conversation moves forward. Rebecca Rettig, chief legal officer at Jito Labs, led Jito’s team in a meeting with the Trump administration. According to Smith, Rettig’s work to secure clearer guidance around liquid staking clears the path for JitoSOL’s inclusion in ETFs and ETPs. 

Jito Labs also teamed up with VanEck and Bitwise in urging the Securities and Exchange Commission (SEC) to allow liquid staking within eight proposed Solana exchange-traded products (ETPs). The group argued that liquid staking tokens provide a capital-efficient and resilient way to incorporate staking into the ETP structure. A week after the appeal, the SEC’s Division of Corporate Finance released guidance clarifying that some forms of liquid staking do not constitute securities offerings. 

While many in the crypto and DeFi communities called the guidance a positive development, SEC Commissioner Caroline Crenshaw argued that the guidance “muddies the waters” and urged liquid staking protocols to move forward carefully. However, despite the regulatory uncertainty, liquid staking protocols have become a crucial cog in the decentralized finance ecosystem.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.