Solana liquid staking on the move
The movers and shakers on Solana
A couple of months ago, liquid staking flipped lending to become the number one category in decentralized finance. Ever since, it has amassed over $21 billion in combined TVL, far exceeding lending and DEXes categories.
Liquid staking is a method of staking where holders get liquidity in the form of a derivative token while the staked assets continue to earn rewards.
Ethereum is currently the home of liquid staking, as about 40% of staked ETH is deposited in liquid staking protocols. This has also led to the rise of many innovative LSD and LSDFi projects that further drive the growth of liquid staking on Ethereum.
In contrast, the liquid staking ecosystem on Solona is young and fast-emerging. Only less than 3% of staked SOL is locked on Solana’s liquid staking protocols. The co-founder of Solana Labs also expressed concerns about this in a tweet some months ago.
When asked about the slow growth of liquid staking on Solana, he pointed out three reasons: smart contract risk, tax risk, and low returns.
But that is set to change with the recent project developments and launches on Solana. Projects like Marinade, Lido, Jito, and BlazeStake are fast emerging and attracting deposits with unique rewards programs. Let’s go right in!
Marinade
Marinade Finance is Solana’s largest liquid staking protocol, with about 5.5 million SOL staked to its Native product. It also has the deepest liquidity and partnerships in Solana. Earlier this month, the project launched Marinade Earn, a three-month incentives campaign to reward stakers that use mSOL, its liquid staking token, or Marinade Native.
The Season 1 of the incentive campaign will run from October 1, 2023, to Jan 1, 2024. Users can earn in two ways during the campaign. First, by staking their SOL or mSOL with Marinade, which lets user boost their mSOL at 7.31APY or redelegate their jitoSOL. Second, by participating in their referral program.
Stakers could use their mSOL to participate in the following snapshot protocols: Solend, Marginfi, Raydium, Orca, Saber, Mango, Drift, and Super Stake SOL, allowing stakers to maximize their capital.
You can stake on Marinade using my referral link here
Lido
Lido, Ethereum’s largest liquid staking project, is also the second-largest LSD project in the Solana ecosystem. For the record, Lido has been on Solana since March 2022, after successfully acquiring the ownership of Chorus One.
Although their growth pace has been slow on Solana, they are not backing out, as they recently proposed a $1.5M funding on Solana for growth and development.
Lido is offering up to 6.7% APY on its LST, stSOL. And they have about 22 pools across several projects they are partnered with.
Jito
Jito is a MEV-powered liquid staking protocol on Solana and one of the fast-emerging liquid staking platforms. The protocol increased SOL TVL by 50% in the previous month and currently has about 2.3M SOL staked.
Recent statistics show that the protocol delegates around 45,000 SOL ($908k) to approximately 56 validators running the Jito-Solana validator client. Airdrop farmers fuel part of the protocol’s growth since the project is still tokenless. Especially with the launch of Jito Points, users are trying to accumulate points to get rewards.
An easy way to earn points is by depositing your $jitoSOL into Drift Protocol and using it as collateral. For every $jitoSOL you deposit, you’ll earn 1.5 points daily. Aside from Drift Protocol, you can deposit on Marginfi or Solend to earn 1.5 points/day, or better still, deposit in Orca or Raydium for 2 points/day.
Lastly, referrals earn you 10% of the points they earn.
If you hold SOL, you can stake on Jito using my referral link here to gain exposure to Solana and probably position for a drop.
Generally, I think liquid staking on Solana is still in its early stages. With the incentives and developments LSD protocols are deploying, it is only a matter of time before it picks. Fingers crossed.
Actionable Strikes
Eligibility for Celestia Airdrop Claim - link
Week 1 of Arbitrum Odyssey - link
Consensys Fellowship for Webs Startups opens on 3rd October - link
zkSync 4-6 Month Paid Virtual Program - link
Subsquid Public Testnet is live - link
Vote on Stargate’s proposal - link
That’s a wrap.
Thanks for reading!
Until next Friday,
Viktor DeFi.
PS: I’d love to hear your feedback and comments.