Analysis of the Current Situation of Liquid Staking in the Solana Ecosystem

With the recovery of the cryptocurrency market, Solana (SOL) has risen to become the sixth largest cryptocurrency in the world. Among all proof-of-stake (PoS) blockchains, Solana's staked assets are second only to Ethereum. However, compared to its market position, the level of capital aggregation in decentralized finance (DeFi) applications within the Solana ecosystem is relatively low, with a total value locked (TVL) of $1.137 billion, which is only 11.3% of its historical peak.

In Solana's TVL, liquid staking projects play a key role, being important factors in driving the TVL back to historical highs. In this field, Marinade and Jito occupy a significant position with the highest TVL, highlighting the importance of the liquid staking category. This article will delve into the main participants in the Solana liquid staking space and conduct a comparative analysis of their strategies and market performance.

Overview of Solana Staking Market

As of December 12, the market capitalization of SOL is $30.53 billion, with a staked market value of $27.62 billion, a staking ratio of 69.18%, and a staked amount of 391 million SOL. The inflation rate is 6.75%, and the reward rate is 6.87%. The staked market value of SOL ranks second among all PoS public chains, second only to ETH; the staking ratio is also relatively high among PoS public chains with higher market capitalizations.

There are a total of 1986 validators in the Solana network, and the top-ranked validators offer an annual percentage yield (APY) close to 8%, with no commission required.

To incentivize SOL holders and enhance network security and censorship resistance, the Solana Foundation has launched the "staking pool program." Users can deposit SOL into the staking pool and receive SPL tokens that represent their share in the staking pool. These SPL tokens are liquid staking tokens (LST) and can circulate freely. Currently, a total of 16.82 million SOL is locked in the staking pool, with an average APY of 6.68%. The SOL in the staking pool accounts for approximately 4.3% of the total staked amount. The top four staking pools are Marinade, Jito, BlazeStake, and Lido, which are also the four largest liquid staking projects in the Solana ecosystem.

Analysis of Major Liquid Staking Projects

Marinade Finance

Marinade Finance is one of the earliest liquid staking protocols in the Solana ecosystem, launched on the Solana mainnet in August 2021. Users can stake SOL on Marinade to receive mSOL, and staking rewards are directly accumulated into mSOL.

Features of Marinade:

• Provide native stake services, allowing users to earn staking rewards without using smart contracts.
• A staking volume of 7.058 million SOL, the highest among liquid staking projects on Solana.
• TVL reached $777 million, the highest on Solana.
• The staking yield is 6.543%
• The staking volume increased by 31.22% in the past 30 days.

The governance token MNDE of Marinade has a circulating market cap of 85.99 million USD and a total market cap of 356 million USD.

Jito

Jito launched its liquid staking platform at the end of 2022. Users can stake SOL in Jito to earn JitoSOL, and the staking rewards are directly accumulated into JitoSOL.

Features of Jito:

• Developed maximum extractable value (MEV) infrastructure for the Solana network.
• A portion of MEV earnings is allocated to JitoSOL, allowing users to achieve relatively higher returns.
• Stake amount 6.38 million SOL
• TVL $455 million
• The staking yield is 6.892%
• The staking volume has increased by 17.77% in the past 30 days.

The governance token JTO of Jito has a circulating market cap of $342 million and a total market cap of $2.973 billion.

BlazeStake

BlazeStake was launched in May 2022 and has rapidly developed recently due to the overall performance of the Solana ecosystem, becoming the 3rd largest liquid staking project on Solana. Users can stake SOL in BlazeStake to receive bSOL.

Features of BlazeStake:

• Use the official staking pool smart contract from Solana Labs
• Have the largest set of validators
• Allow users to liquid stake to specific validators
• stake volume of 1.52 million SOL
• TVL is $108 million
• The staking yield is 6.232%
• The staking volume increased by 177% over the past 30 days.

The governance token BLZE of BlazeStake has a total market value of 38.84 million USD.

Lido

Lido launched its liquid staking service on Solana in September 2021, but announced in October 2023 that it will stop accepting new stakes on Solana. Users can stake SOL in Lido to receive stSOL.

The situation of Lido on Solana:

• stake amount 887,000 SOL
• TVL is 63.4 million USD
• The staking yield is 6.717%
• The staking volume has decreased by 41.43% in the past 30 days.

The governance token LDO of Lido has a circulating market cap of $2.095 billion and a total market cap of $2.356 billion.

The Application of LST in DeFi

LSTs (mSOL, JitoSOL, bSOL, stSOL) from various projects have received wide support in Solana's DeFi applications:

• Lending Protocols: marginfi and Solend support various LSTs as collateral.
• DEX: In Orca, both mSOL/SOL and bSOL/SOL have high Liquidity.

The increase in the staking volume and liquidity in the DEX may be related to the project's incentive measures. For example, Blaze offers the highest incentives, with a 15.37% APR BLZE token subsidy for deposits in Solend.

Summary

There are several representative liquid staking solutions in the Solana ecosystem, all of which are supported by DeFi projects within the ecosystem. However, the total amount of liquid staking is relatively small, with SOL staked through staking pools accounting for only 4.3% of all staked SOL.

Project features:

• Marinade: The earliest to launch, providing native stake services.
• Jito: Provides higher returns through MEV infrastructure
• BlazeStake: Allows users to stake to specific validators.
• Lido: Multi-chain liquid staking service provider

Incentives are still crucial for the increase in staking volume and the liquidity of LST in DEX. In the future, the Solana ecosystem may see the emergence of more competitive liquid staking solutions.