What is the Canary Marinade Solana ETF?
The Canary Marinade Solana ETF is an exchange-traded product designed to provide investors with exposure to the price of Solana (SOL) through a traditional brokerage account.
The Trust holds SOL directly. A secondary investment objective is for the Trust to earn additional SOL through the validation of transactions in the Solana Network’s proof-of-stake process.¹
What is SOL?
SOL is the native digital asset of the Solana Network, a decentralized proof-of-stake blockchain.
SOL is used to pay transaction fees on the network and to secure the network through staking. The Solana protocol introduced proof-of-history, a timestamping mechanism that orders on-chain transactions, which is intended to provide transaction processing speed and capacity advantages relative to networks that rely on sequential block production.¹
How does the ETF obtain exposure to SOL?
The Trust holds actual SOL rather than using futures contracts or derivatives.
The value of the Shares is expected to reflect the value of the Trust’s SOL holdings, less fees and expenses.¹
How is the Trust’s NAV determined?
The Trust establishes its net asset value (NAV) by reference to the CoinDesk Solana CCIXber 60m New York Rate, calculated by CoinDesk Indices based on a 60-minute time-weighted average price aggregated from executed trade flow across major SOL trading platforms.¹
Does buying the ETF mean I own SOL?
No. Investors own shares of the ETF. The Trust owns the underlying SOL on behalf of shareholders.
How is the Trust’s SOL stored?
According to the registration statement, the Trust’s SOL is held by a qualified digital asset custodian using institutional custody solutions. BitGo Trust Company, Inc. serves as the Trust’s custodian and is responsible for safekeeping all of the SOL owned by the Trust.¹
Can I transfer my ETF shares to a crypto wallet?
No. ETF shares trade through brokerage accounts and cannot be transferred to blockchain wallets.
Can I redeem ETF shares for SOL?
No. Retail investors generally buy and sell ETF shares on an exchange.
Shares are not redeemable directly for SOL by individual investors.
How does the ETF’s price relate to the price of SOL?
The Trust is designed to track the value of its SOL holdings, less fees and expenses.
Like other exchange-traded products, market prices may vary slightly from NAV during the trading day.
What are the primary risks?
As described in the registration statement, risks include:
- Changes in the market price of SOL
- Digital asset market volatility
- Blockchain and network risks
- Custody risks
- Regulatory developments
- Risks associated with staking, including reliance on the Staking Provider and liquidity constraints during lock-up periods
- Operational risks
Investors should review the prospectus carefully before investing. For a more comprehensive list of the Fund’s risks, please view the prospectus. Read the prospectus carefully before investing.¹
Is the ETF guaranteed to earn staking rewards?
No. Staking rewards can vary over time and may be affected by network conditions, validator performance, regulatory developments, or other operational factors. There is no guarantee that staking rewards will continue or achieve any particular level.
The Solana Network does not currently implement slashing, meaning staked SOL is not subject to automatic penalties for validator misbehavior. There is no guarantee that slashing or similar punitive mechanisms will not be implemented in the future.¹
¹ https://www.sec.gov/Archives/edgar/data/2041869/000199937125018022/canary-424b3_111725.htm
Investing Involves Significant Risk. The loss of principal is possible. Canary SOL ETF (the “Fund”) may not be suitable for all investors. This website does not constitute a recommendation of any investment strategy or product for a particular investor. Investors should consult a financial advisor/financial consultant before making any investment decisions.
The Fund’s investment objectives, risks, charges and expenses should be considered before investing. The prospectus contains this and other important information, and it may be obtained at https://canaryetfs.com/SOLC/prospectus/. Read it carefully before investing.
The Fund is not a registered commodity pool or an investment company registered under the Investment Company Act of 1940. Shares of the Fund are not subject to the same regulatory requirements as mutual funds. These investments are not suitable for all investors. Funds focusing on a single asset generally experience greater volatility. Please ask your financial advisor for more information about these risks. Digital assets, such as SOL, are a relatively new asset class, and the market for digital assets is subject to rapid changes and uncertainty. Digital assets are largely unregulated and digital asset investments may be more susceptible to fraud and manipulation than more regulated investments.
SOL is subject to unique and substantial risks, including significant price volatility and lack of liquidity, and theft. The value of an investment in the Fund could decline significantly and without warning, including to zero. SOL is subject to rapid price swings, including as a result of actions and statements by influencers and the media, changes in the supply of and demand for digital assets, and other factors. There is no assurance that SOL will maintain its value over the long-term.
Fund Risks
Failure by the Fund’s Custodians to exercise due care in the safekeeping of the Fund’s SOL could result in a loss to the Fund. Investors cannot be assured that the Custodians will maintain adequate insurance with respect to the SOL held by the Custodians on behalf of the Fund to cover such losses.
The Fund is new with a limited operating history. The Fund is not actively managed and will not take any actions to take advantage, or mitigate the impacts, of volatility in the price of SOL. An investment in the Fund is not a direct investment in SOL. Investors will not have any rights that SOL holders have and will not have the right to receive any redemption proceeds in SOL. Shares of the Fund are generally bought and sold at market price (not NAV) and are not individually redeemed from the Fund. Only Authorized Participants may trade directly with the Fund and only large blocks of Shares called “creation units.” Your brokerage commissions will reduce returns.
The amount of SOL represented by shares of the Fund will decrease over the life of the Fund due to sales of SOL necessary to pay the sponsor’s fee and fund expenses. Without increases in the price of SOL sufficient to compensate for that decrease, the price of the shares will also decline, and investors will lose money on their investment. The liquidation of the Fund may occur at a time when the disposition of the Fund’s SOL will result in losses to investors.
Staking rewards generated by the Fund’s staking program will be subject to fees shared among the Staking Provider and its network of validators. The amounts owed or paid to the Staking Provider and its network of validators are collectively referred to as the “Staking Fees.” The Staking Fees will reduce the amount of SOL rewards that are generated from the Fund’s staking program that are received by the Fund.
Staking activity comes with a risk of loss of SOL. None of the Fund’s assets, including any staked assets, are subject to the protections enjoyed by depositors with Federal Deposit Insurance Corporation (“FDIC”) or SIPC member institutions. The staked assets may also be subject to “slashing” penalties. Slashings occur when a validator attests to two different histories of the chain and penalties occur when a validator is offline for a prolonged period of time. The Fund itself will not engage in staking activities, including the operation of a validator node. Instead, the staking program will be operated through the Fund’s service providers, including the Custodian and Marinade Select (the Fund’s initial “Staking Provider”). In combination, they deter malicious validators from attacking blockchains and ensure consistent participation of validators to maintain network stability. While the Sponsor does not expect the activities of the Staking Provider to result in slashing penalties, there can be no guarantee that slashing penalties will not occur. Furthermore, the Custodian’s liability to the Fund for the actions of the Staking Provider is limited, and the Custodian may lack the assets or insurance in order to support the recovery of any losses incurred. Accordingly, there can be no guarantee that the Fund would recover any of its staked assets, or the value thereof, if it is subject to slashing or penalties.
The Fund’s Marketing Agent is Paralel Distributors LLC which is not affiliated with Canary Capital Group LLC or its affiliates, U.S. Bank Global Fund Services, U.S. Bank National Association, BitGo Trust Company LLC and Marinade Finance LLC.
