Fidelity's FSOL Stakes 99.64% of SOL Holdings as New Prospectus Formalizes 100% Authority

Fidelity's Solana SOL$97.00-2.2% fund (FSOL) was already staking nearly its entire position before its new prospectus said it could stake all of it. When Fidelity filed updated 424b3 supplements with the SEC on August 21, 2026, the documents formalized authority the fund was exercising at near-maximum scale: as of June 30, FSOL had staked 1,675,797 of its 1,687,589 SOL, a 99.64% staking rate with a fair value of $126.3 million against $127.079 million in net assets.

The FSOL 424b3 filing grants the fund formal authority to stake up to 100% of holdings, with no minimum staking requirement. A parallel FETH 424b3 filing extends the same authority to the Fidelity Ethereum Fund — and marks the first time FETH has been positioned to stake at all.

How the 85/15 Split Reaches FSOL Investors

The new FSOL prospectus establishes a staking reward fee of 15% of gross rewards, leaving 85% inside the trust. That retained 85% is allocated in priority order: fund expenses first, then quarterly cash distributions to investors, then redemption support, then additional staking.

The quarterly distributions are the most directly investor-facing element. The prospectus does not guarantee specific amounts or exact timing — distributions depend on realized staking rewards — but the structure commits Fidelity to passing staking yield to FSOL holders in cash on a quarterly basis, rather than rolling all returns back into additional SOL positions.

How FSOL Handles Redemptions With 99.64% of Holdings Staked

A fund staking nearly all of its assets faces a structural question: how does it meet redemptions when the underlying assets are locked? The FSOL prospectus discloses a layered approach.

Reserve assets serve as the primary liquidity buffer. If reserves are insufficient, Fidelity can extend the settlement period temporarily. Cash-in-lieu substitution is available at Fidelity's discretion beyond that. Under normal network conditions, FSOL expects to recover staked SOL within approximately two days — Solana's unbonding mechanics are substantially faster than Ethereum's, a difference the filing makes explicit.

The prospectus also names future liquidity tools Fidelity is exploring: credit facilities, crypto asset borrowing, validator position sales, and liquid staking token structures. None of these are operational yet; they are identified as options the fund may develop.

FETH Begins Staking After August 21, With Different Exit Mechanics

Per its August 21 prospectus, the Fidelity Ethereum Fund held 476,311 ETH ($758.6 million net assets) with no staked ETH disclosed as of June 30. Fidelity amended FETH's trust and custody arrangements in August 2026 and the new prospectus states staking "is expected to begin as soon as practicable after Aug. 21."

FETH's exit mechanics carry more uncertainty than FSOL's. The Ethereum filing has no fixed unstaking timeline: validators must first exit the active set, then complete a mandatory waiting period before network withdrawals can process. The prospectus flags this variable window as a redemption liquidity risk — one that FSOL, with Solana's shorter unbonding period, does not carry to the same degree.

FSOL's Position Among Solana Spot ETFs

FSOL's near-total staking allocation is the most operationally significant structural fact about the fund right now. 21Shares cut the TSOL sponsor fee to zero for 12 months starting July 28, 2026, shifting competition toward fees; FSOL's 100% staking authority and formal quarterly distribution schedule represent a distinct axis. Spot Solana ETFs recorded $115 million in inflows during May 2026, their strongest month since launch, and the formal disclosures Fidelity has now filed give investors clearer terms on what the yield component of these products actually delivers.

The August 21 filings are prospectus supplements, updating investor disclosures rather than initiating a new regulatory review. FSOL's 99.64% staking rate was already in place. What the new documents give investors in writing is the exact fee split, the priority order for distributing staking income, and the full redemption ladder — from reserves down to the future liquidity tools Fidelity has not yet built.