As the staking sector on Solana continues to thrive, the network has emerged as a strong contender in the realm of decentralized finance (DeFi). Staking, which involves locking up assets to enhance network security and earn yields, plays a crucial role in the on-chain economy. While Ethereum requires a substantial amount of 32 ETH for native staking or offers options for liquid staking through providers like Lido or Rocket Pool, Solana simplifies the process by allowing users to stake natively through its delegated Proof-of-Stake system.
Despite Solana surpassing Ethereum in total staked assets with $61B, it lags in liquid staking with only 6.5% of staked SOL being in liquid staking tokens (LSTs). This indicates a significant growth opportunity for Solana in the realm of liquid staking.
Solana’s Top Liquid Staking Tokens
Within the Solana ecosystem, Jito, Marinade Finance, and Jupiter stand out as the top players in the liquid staking landscape, collectively holding 80% of all SOL in LSTs.
Jito’s JitoSOL
JitoSOL, the largest LST on Solana, accounts for 48% of liquid staked SOL, valued at $1.7B. Jito is renowned for its airdrop and unique approach to MEV, which enhances user returns while maintaining network integrity. By supporting validators that optimize block space and transactions fairly, Jito promotes positive MEV behavior, leading to increased earnings for JitoSOL holders. JitoSOL’s integration with various DeFi protocols has made it a popular asset for lending, borrowing, and yielding opportunities across the network.
Marinade Finance’s mSOL
Marinade Finance, holding 22% of the total LST market share, offers mSOL, a liquid staking token that appreciates over time with staking rewards. Despite facing competition from Jito, Marinade continues to innovate by introducing features like Marinade Native and Protected Staking Rewards to enhance user experience and security.
Jupiter’s JupSOL
Jupiter’s JupSOL, holding 10% of all SOL staked in LSTs, provides instant liquidity for staked SOL with high yields and MEV kickbacks. By increasing the stake of Jupiter’s validator, JupSOL boosts transaction efficiency and success rates on platforms like Jupiter and Sanctum, where Jupiter’s validator is utilized for transaction processing.
The Role of Sanctum
Sanctum, launched in February 2021, allows whitelisted validators to create and launch custom liquid staking tokens while streamlining liquidity for these derivatives. By addressing key issues in liquid staking and expanding options for LSTs, Sanctum plays a crucial role in shaping the future of liquid staking on Solana.
With Solana’s vibrant liquid staking landscape and the innovative solutions offered by key protocols and platforms, the ecosystem is poised for continued growth and adoption in the DeFi space.
Title: The Evolving Landscape of Liquid Staking and Restaking on Solana
As blockchain technology continues to evolve, new possibilities for decentralized finance (DeFi) are constantly being explored and implemented. Solana, known for its high throughput and low latency, is at the forefront of this movement, with various projects focusing on liquid staking and restaking protocols to enhance the ecosystem. Two notable projects making waves in this space are Sanctum and the restaking providers Solayer, Cambrian, and Picasso.
Sanctum, a platform dedicated to liquid staking, offers a range of innovative features designed to maximize returns for users. The Sanctum Router facilitates seamless LST conversions, while the Sanctum Reserve provides instant liquidity for unstaking. The Infinity Pool, a multi-LST liquidity pool, stands out for supporting an unlimited number of LSTs natively, ensuring fair prices and dynamic swap fee adjustments. By depositing LSTs or SOL into the Infinity Pool, users can earn Sanctum’s LST, INF, which is usable in various DeFi protocols.
Looking beyond liquid staking, Sanctum envisions a broader ecosystem with three core products, including the Sanctum Launchpad, an initiative to support new projects using LSTs. These developments aim to enhance liquidity, expand LST use cases, and bolster the on-chain economy through Launchpad, Profiles V2, and Pay.
On the other hand, the Solana network is witnessing the emergence of restaking protocols like Solayer, Cambrian, and Picasso. Solayer leverages Solana’s architecture for multitasking and fast transactions to enhance workload distribution and service customization. Cambrian focuses on reducing costs and improving resource allocation for decentralized oracles and AI processors, positioning itself as an on-chain alternative to traditional cloud providers. Picasso, originally bridging Solana and Cosmos, now serves as a restaking hub supporting various projects within the Solana ecosystem. These initiatives aim to provide new staking options, facilitate liquidity exchange, and enhance the overall security and utility of Solana and its LSTs.
The expansion of liquid staking and restaking on Solana signifies a pivotal moment for the network’s staking economy. With innovative protocols like Sanctum, Solayer, Cambrian, and Picasso driving growth, the ecosystem is primed for significant development. As more projects leverage these technologies and explore new use cases for LSTs, Solana’s position in the DeFi space is poised to strengthen, offering users competitive yields and a diverse range of opportunities for participation in the growing blockchain landscape.The advancement of technology plays a significant role in shaping new economies and enabling growth across various sectors. With the integration of social media platforms like Twitter, Facebook, and TikTok, businesses and individuals are able to reach wider audiences and engage in new ways of commerce.
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