Article written by: Thejaswini MA

Article translation: Block unicorn

Preface

In 1688, ship captains would gather at Edward Lloyd’s Coffee House in London to find someone willing to insure their voyages. Wealthy merchants would sign the ship’s details and become “underwriters,” guaranteeing these risky voyages with their personal wealth.

The more reputable the underwriter, the safer it is for everyone. The safer the system, the more business it attracts. It's simple: provide the capital, reduce everyone's risk, and then take a share of the profits.

Reading the new SEC guidance, it’s clear that cryptocurrencies simply digitize the mechanism invented by coffee shop underwriters — people earn returns by putting their assets at risk, making the entire system safer and more trusted.

Pledge. Yes, it's back on the agenda.

Everything changed on May 29, 2025. That’s the day the US government made it clear that staking won’t get you in legal trouble. First, let’s review why this is so important right now.

In staking, you lock up your tokens to help secure the network and earn a steady stream of rewards.

Validators use their staked tokens to verify transactions, propose new blocks, and keep the blockchain running smoothly. In return, the network pays them in newly minted tokens and transaction fees.

Without stakers, proof-of-stake networks like Ethereum would collapse.

Sure, you can stake your tokens, but no one knows if the SEC will come knocking on your door one day, claiming you’re conducting an unregistered securities offering. This regulatory uncertainty has left many institutions sitting on the sidelines, watching with envy as retail stakers earn 3-8% annualized returns.

The Big Staking Boom

On July 3, the Rex-Osprey Solana + Staking ETF went live, becoming the first fund in the United States to provide direct cryptocurrency investment and receive staking rewards. It holds SOL through a Cayman subsidiary and uses at least half of its holdings for staking.

“The first U.S. collateralized crypto ETF,” Rex Shares announced.

And they are not alone.

Robinhood just launched crypto staking for US customers, with Ethereum and Solana as the first options. Kraken added Bitcoin staking via the Babylon protocol, allowing users to earn BTC while maintaining their native chain.

VeChain launched its $15 million StarGate staking program. Even Bit Digital abandoned its entire Bitcoin mining operation to focus on Ethereum staking.

What has changed now?

Two regulatory dominoes

First, the staking guidance issued by the U.S. Securities and Exchange Commission (SEC) in May 2025.

It says that if you stake your own cryptocurrency to help run the blockchain, that’s perfectly fine and is not considered a high-risk investment or security.

This covers staking individually, delegating your tokens to others, or staking through a trusted exchange, as long as your stake directly helps the network. This will remove most staking from the definition of an “investment contract” under the Howey test. This means you no longer need to worry about accidentally violating complex investment laws simply because you stake and earn rewards.

The only red flag here is someone promising guaranteed profits, especially when mixing staking with lending.

Or when issuing fancy terms like DeFi bundles, guaranteed returns, or yield farming.

Second is the CLARITY Act.

This is a law proposed in Congress that seeks to clarify which government agency is responsible for different digital assets. It is specifically designed to protect those who simply run nodes, stake, or use self-hosted wallets from being treated like Wall Street brokers.

It introduces the concept of “investment contract assets,” a new category of digital commodities, and establishes criteria for determining when a digital asset is a security (regulated by the SEC) or a commodity (regulated by the CFTC). The bill establishes a process for determining when a blockchain project or token is “mature” and can be transferred from SEC to CFTC regulation, and sets time limits for SEC reviews to prevent indefinite delays.

So, what does this mean for you?

Thanks to the SEC’s guidance, you can now stake your crypto with greater confidence in the U.S. If the CLARITY Act passes, it will make it easier and more secure for everyone who wants to stake or participate in crypto.

Staking rewards are still taxed as ordinary income when you gain “disposition and control”, and if you later sell the rewards for a profit, you will be subject to capital gains tax. All staking income, no matter how much, must be reported to the Internal Revenue Service (IRS).

Who’s in the spotlight? Ethereum.

No, it's still about $2,500.

While the price is flat, Ethereum’s collateralization metrics are showing signs of change. The amount of ETH staked just hit a new all-time high of over 35 million, almost 30% of the total circulating supply. While these infrastructure builds have been ongoing for months, they are suddenly becoming more important now.

What’s happening in corporate boardrooms?

BitMine Immersion Technologies, which is chaired by Fundstrat’s Tom Lee, has just raised $250 million to buy and stake Ethereum (ETH). Their strategy is to bet that staking rewards plus potential price appreciation will outperform traditional treasury assets.

SharpLink Gaming took this strategy a step further by expanding their ETH reserves to 198,167 tokens and staking their entire holdings. In just one week in June, they earned 102 ETH in staking rewards. Simply locking up tokens is like getting “free money.”

Meanwhile, Ethereum ETF issuers are lining up for staking approval. Bloomberg analysts predict that there is a 95% chance that staking ETFs will receive regulatory approval in the coming months. BlackRock’s head of digital assets called staking “a huge step forward” for Ethereum ETFs, and he may be right.

If approved, these staking ETFs could reverse the outflows that have plagued Ethereum funds since their launch. Why settle for just price exposure when you can get both price exposure and yield?

Cryptocurrency speaks the language of Wall Street

For years, traditional finance has struggled to understand the value proposition of cryptocurrency. Digital gold? Maybe. Programmable money? Sounds complicated. Decentralized applications? What’s wrong with centralized applications?

But what about yield? Wall Street understands yield. Granted, bond yields have recovered from their near-zero lows in 2020, with the one-year U.S. Treasury yield back around 4%. But a regulated crypto fund that can generate 3-5% annualized staking rewards while also offering potential upside in the underlying assets is damn tempting.

Legality is critical. When pension funds can buy exposure to Ethereum through a regulated ETF and earn a return on securing the network, that’s a big deal.

The network effect is already beginning to emerge. As more institutions participate in staking, the network becomes more secure. As networks become more secure, they attract more users and developers. As adoption increases, transaction fees also increase, which in turn increases staking rewards. This is a virtuous cycle that benefits all participants.

You don’t need to understand blockchain technology or believe in decentralization to appreciate an asset that rewards you for holding it. You don’t need to believe in Austrian economics or distrust central banks to appreciate an asset as productive capital. You just need to understand that the network needs to be secure, and the participants who provide security deserve to be rewarded.