Solana Staking Market Analysis: The Four Troops in Liquidity Staking

Original Title: "Solana Staking Market Analysis: Four Driving Forces in the Liquidity Staking Field"

Original Author: Jiang Haibo, PANews

With the recovery of the market, Solana (SOL) has risen to become the sixth largest cryptocurrency, and in all proof-of-stake (PoS) based blockchains, its staked assets are second only to Ethereum, ranking second. However, compared to its market position, the funding concentration of decentralized finance (DeFi) applications in the Solana ecosystem is relatively low, with a total locked value (TVL) of $1.137 billion, only 11.3% of its historical high.

In Solana's TVL, liquidity staking projects are particularly important, as they are key to driving TVL back to historical highs. In this race, Marinade and Jito have taken significant positions with their highest TVL, highlighting the importance of liquidity staking. This article from PANews will delve into the important players in the liquidity staking field on Solana and compare and analyze their strategies and market performance.

质押与流动性质押整体情况

Pledge and overall situation of liquidity pledge

According to data from Staking Rewards, as of December 12th, the market capitalization of SOL was $30.53 billion, with a staking market value of $27.62 billion, a staking ratio of 69.18%, a staking quantity of 391 million SOL, an inflation rate of 6.75%, and a reward rate of 6.87%. Among them, SOL's staking market value ranks second among all PoS public chains, second only to ETH; the staking ratio is also relatively high among PoS public chains with high market capitalization.

Marinade data shows that there are a total of 1986 validators in Solana, with top-ranking validators offering an APY close to 8% without commission.

In order to reward SOL holders, increase network security and resistance to censorship, Solana Foundation has launched the "Staking Pool Plan", which allows users to deposit SOL into the staking pool and receive SPL tokens representing their share in the staking pool. These SPL tokens are liquidity staking tokens (LST) that can be freely circulated. According to Solana Compass data, a total of 16.82 million SOL is locked in the staking pool, providing an average APY of 6.68%. Therefore, SOL in the staking pool accounts for approximately 4.3% of the total staking volume. The top 4 staking pools are Marinade, Jito, BlazeStake, and Lido, which are the largest 4 liquidity staking projects in the Solana ecosystem.

Marinade Finance

Marinade Finance is the earliest liquidity staking protocol in the Solana ecosystem. It was established with the support of the Solana ecosystem during the 2021 Spring Solana x Serum Hackathon event. The liquidity staking protocol was launched on the Solana mainnet in August 2021. Staking SOL on Marinade can earn mSOL, and staking rewards are directly accumulated in mSOL.

Unlike other projects, Marinade also provides native staking services, allowing users to earn staking rewards without using any smart contracts (and therefore no LST).

Marinade has a total of 7.058 million SOL staked, which is the highest among all liquidity staking projects on Solana. It is also the project with the highest TVL on Solana, valued at $777 million. The staking yield is 6.543%, and the staked amount has increased by 31.22% in the past 30 days.

Marinade's governance token is MNDE, with a circulating market value of $85.99 million and a total market value of $356 million. It has increased by 22.2% in the past 7 days.

Jito

Jito completed its Series A financing led by Multicoin Capital and Framework Ventures in August 2022 and will launch a liquidity staking platform by the end of 2022. Staking SOL in Jito will earn JitoSOL, and staking rewards will accumulate directly in JitoSOL.

Unlike other liquidity collateral projects, Jito has developed the largest extractable value (MEV) infrastructure for the Solana network, including products such as the Jito Solana client, Jito Bundles that allow searchers to send transaction packages to validators, Jito Block Engine, and MEV allocation system. Due to its own MEV business, a portion of the MEV revenue is allocated to JisoSOL, so users who stake through Jito also receive relatively higher returns.

Jito has pledged 6.38 million SOL; the amount of pledge has increased by 17.77% in the past 30 days; TVL is 455 million US dollars; the pledge yield is 6.892%.

Jito's governance token is JTO, with a circulating market value of $342 million and a total market value of $2.973 billion. It has increased by 46.6% in the past 7 days.

BlazeStake

BlazeStake was originally a niche staking pool that launched in May 2022, but due to the collective explosion of the Solana ecosystem, the governance token has increased by several tens of times from its low point. As a result, BlazeStake has surpassed Lido to become the third largest liquidity staking project on Solana. Staking SOL in BlazeStake can earn bSOL, and staking rewards are directly accumulated in bSOL.

BlazeStake mainly uses Solana Labs' official staking pool smart contract, which has the largest validator set and allows users to stake liquidity to specific validators.

BlazeStake has 1.52 million SOL staked; staking has grown by 177% in the past 30 days; TVL is $108 million; staking yield is 6.232%.

Blaze's governance token is BLZE, with no disclosed circulating market value and a total market value of $38.84 million. It has increased by 66.5% in the past 7 days.

Lido

Lido launched its liquidity staking service on Solana in September 2021, which dominates the liquidity staking on ETH. However, its development on other chains has not been ideal, and it has not taken advantage of its first-mover and brand advantages. It also announced in October that it would stop accepting new staking on Solana. Staking SOL in Lido can earn stSOL, and staking rewards are also accumulated in stSOL.

Related reading: "Lido under attack: Shutting down multiple public chain services, also unwelcome in the Ethereum ecosystem."

Lido has 887,000 SOL staked; the staked amount has decreased by 41.43% in the past 30 days; TVL on Solana is $63.4 million; staking yield is 6.717%.

Lido's governance token is LDO, with a circulating market value of $2.095 billion and a total market value of $2.356 billion. It has fallen 6.7% in the past 7 days.

Several Applications of LST in DeFi

Marinade's mSOL, Jito's JitoSOL, Blaze's bSOL, and Lido's stSOL have all received good support in Solana's DeFi applications.

The two largest lending protocols on Solana, marginfi and Solend, both support mSOL, JitoSOL, bSOL, and stSOL as collateral for borrowing. However, after Lido's announcement, stSOL has been delisted from these two projects.

On the Solana-based DEX Orca, both mSOL/SOL and bSOL/SOL have over ten million dollars in liquidity, and there are also trading pairs available directly between mSOL and bSOL. However, the liquidity for Jito/SOL and stSOL/SOL is relatively low.

The growth of collateral and liquidity in DEX may be related to the incentive measures of the project. Blaze provides the highest incentive, and depositing in Solend can receive a BLZE governance token subsidy with an APR of 15.37%, while depositing mSOL can receive an MNDE governance token subsidy with an APR of 1.98%. Jito has not yet provided incentives for the adoption of JitoSOL in DeFi, and Lido's tokens have been mostly distributed, making it unable to continue incentives and choosing to exit the market.

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