Solana Liquid Staking Market Analysis: Four Major Participants

Recently, with the market recovering, Solana (SOL) has risen to the sixth position in the cryptocurrency market capitalization ranking, with its staking assets scale second only to Ethereum among all PoS blockchains. However, the degree of capital aggregation of DeFi applications in the Solana ecosystem is relatively low, with a total locked value (TVL) of $1.137 billion, which is only 11.3% of its historical peak.

In Solana's TVL, liquid staking projects play a significant role and are key factors in driving the recovery of TVL. Marinade and Jito stand out with the highest TVL, highlighting the importance of the liquid staking category. This article will delve into the main players in the Solana liquid staking space and provide a comparative analysis of their strategies and market performance.

Staking and Liquid Staking Overview

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

Solana has a total of 1,986 validators, with the top validators offering an APY close to 8% and no commission. To enhance network security and censorship resistance, the Solana Foundation launched the "staking pool program," allowing users to receive SPL tokens representing their share of the staking pool (i.e., liquid staking tokens LST). The staking pool has locked 16.82 million SOL, accounting for approximately 4.3% of the total staked amount, with an average APY of 6.68%.

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 mainnet in August 2021. Users can stake SOL to receive mSOL, and staking rewards are directly accumulated in mSOL. Marinade also offers native staking services, allowing users to earn staking rewards without the need for smart contracts.

• Stake Amount: 7.058 million SOL (maximum)
• TVL: $777 million (highest)
• Stake Yield: 6.543%
• 30-day stake volume growth: 31.22%
• Governance Token: MNDE (Circulating Market Cap $85.99 million, Total Market Cap $356 million)

Jito

Jito launched its liquid staking platform at the end of 2022. Users can stake SOL to earn JitoSOL, with staking rewards accumulating directly. What makes Jito unique is its development of MEV infrastructure for the Solana network, with a portion of the MEV profits allocated to JitoSOL holders, providing higher returns.

• Staked Amount: 6.38 million SOL
• TVL: $455 million
• stake yield: 6.892%
• 30-day stake volume growth: 17.77%
• Governance Token: JTO (Circulating Market Cap: $342 million, Total Market Cap: $2.973 billion)

BlazeStake

BlazeStake was launched in May 2022 and has rapidly grown due to the explosion of the Solana ecosystem. Users can stake SOL to receive bSOL. BlazeStake uses the official staking pool smart contract from Solana Labs, featuring the largest set of validators, allowing users to liquid stake to specific validators.

• Stake Amount: 1.52 million SOL
• TVL: 108 million USD
• Stake yield: 6.232%
• 30-day stake volume growth: 177%
• Governance Token: BLZE (Total Market Cap $38.84 million)

Lido

Lido launched its liquid staking service on Solana in September 2021, but its development did not meet expectations, and it announced in October that it would stop accepting new stakes. Users staking SOL can receive stSOL.

• Staking Amount: 887,000 SOL
• TVL: 63.4 million USD
• Stake Yield: 6.717%
• 30-day stake volume change: -41.43%
• Governance Token: LDO (Circulating Market Cap $2.095 billion, Total Market Cap $2.356 billion)

The Application of LST in DeFi

All projects' LSTs are supported in Solana DeFi applications. The main lending protocols marginfi and Solend support mSOL, JitoSOL, and bSOL as collateral, but have delisted stSOL. In DEX Orca, mSOL/SOL and bSOL/SOL have high liquidity.

Incentive measures have a significant impact on the growth of staking volume and the liquidity of LST. Blaze offers the highest incentives, leading to a substantial increase in staking volume recently. Marinade also provides governance token subsidies. Jito has not yet launched an incentive program, while Lido has exited the market due to the near completion of token distribution.

Conclusion

The Solana ecosystem includes various representative liquid staking solutions, each with its own characteristics and supported by DeFi projects. However, the total amount of liquid staking is still relatively low, accounting for only 4.3% of the total staking amount. In the future, more competitive solutions may emerge, such as marginfi's LST. Incentives remain a key factor in increasing staking amounts and LST liquidity, and the strategies of each project in this regard will impact their market performance.