Company: OSOL
Filing Date: 2025-10-22
Form Type: S-1
Source: 0001493152-25-018952
Chunk: 22

Company: Osprey Solana Trust
Filing Date: 2025-10-22
Form: S-1
Chunk 22
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 the Solana Network, which may diminish its use. Users or other stakeholders on the Solana Network could also view the existence       
 of MEV as unfair manipulation of decentralized digital asset networks, and refrain from using DeFi protocols or the Solana Network       
 generally. In addition, it’s possible regulators or legislators could enact rules which restrict the use of MEV, which could             
 diminish the popularity of the Solana Network among users and validators. Any of these or other outcomes related to MEV may adversely    
 affect the value of SOL and the value of the Shares.                                                                                     |

| 19 |

Validators may suffer losses due to Staking, or Staking may prove unattractive to validators, which could adversely affect the Solana Network.

Validation on the Solana Network requires SOL to be transferred into smart contracts on the underlying blockchain network not under the control of the person who owns such SOL. If the Solana Network source code or protocol were to fail to behave as expected, suffer cybersecurity attacks or hacks, experience security issues, or encounter other problems, such transferred (i.e., staked) SOL may be irretrievably lost. In addition, the Solana Network’s underlying protocol dictates requirements for participation in validation activity, and may impose penalties, if the relevant activities are not performed correctly. In addition, the Solana Networks dictate requirements for participation in validation activity, and may impose penalties, if the relevant activities are not performed correctly. The Solana Network’s penalties (i.e., “slashing”) are imposed if a validator commits malicious acts related to the validation of blocks with invalid transactions. Currently on the Solana Network, slashing generally operates by social consensus, rather than being automatically applied by the protocol’s code. The Solana community generally aspires to slash 100% of staked assets in cases where a Solana node is maliciously trying to violate safety rules and 0% during routine operations. As a result, there is currently no automatic slashing in the Solana Network. Rather, for regular consensus, after a safety violation, the Solana Network will halt. The validators will analyze the data prior to the halt to determine who was responsible and propose that the stake of the malicious actors responsible for the safety violation should be slashed after restart, typically 100%. Automatic slashing (i.e. slashing functionality that is applied by the protocol’s code) is expected to be introduced in the future. Separately, as part of the “activating” and “de-activating” or “cooling down” processes of