Analysis of Major Players in the Liquid Staking Sector of the Solana Ecosystem

Recently, with the market warming up, Solana (SOL) has risen to become the sixth largest cryptocurrency. Among all proof-of-stake (PoS) blockchains, its staked asset scale ranks second only to Ethereum. However, the level of capital aggregation in decentralized finance (DeFi) applications within the Solana ecosystem is relatively low, with a total locked value (TVL) of $1.137 billion, which is only 11.3% of its historical high.

In Solana's TVL, liquid staking projects play an important role and are key to driving the TVL back to historic highs. Among them, 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 important participants in the liquid staking field on Solana and conduct a comparative analysis of their strategies and market performance.

Overview of Solana Staking

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 the top market cap PoS public chains.

There are a total of 1986 validators in Solana, with the top-ranked validators offering an APY of nearly 8%, all with no commission.

In order to reward SOL holders, increase network security, and enhance anti-censorship capabilities, Solana 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. 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 about 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.

Main Liquid Staking Project Analysis

Marinade Finance

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

Marinade also offers native staking services, allowing users to earn staking rewards without using smart contracts.

• Staked amount: 7.058 million SOL (the highest in the liquid staking projects on Solana)
• TVL: $777 million (highest on Solana)
• Stake Yield: 6.543%
• Staking volume growth in the past 30 days: 31.22%

The governance token of Marinade is MNDE, with 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. In Jito, staking SOL earns JitoSOL, and the staking rewards are directly accumulated into JitoSOL.

Jito has developed a Maximum Extractable Value (MEV) infrastructure for the Solana network, and a portion of the MEV profits will be allocated to JisoSOL, making the returns for users who stake through Jito relatively higher.

• Staking Amount: 6.38 million SOL
• TVL: $455 million
• Stake yield: 6.892%
• Staking volume growth in the past 30 days: 17.77%

The governance token of Jito is JTO, with a circulating market value of 342 million USD and a total market value of 2.973 billion USD.

BlazeStake

BlazeStake was launched in May 2022 and has rapidly grown recently due to the collective explosion of the Solana ecosystem, surpassing Lido to become the 3rd largest liquid staking project on Solana. By staking SOL in BlazeStake, users can receive bSOL.

BlazeStake mainly uses the official stake pool smart contract from Solana Labs, which has the largest set of validators, allowing users to liquid stake to specific validators.

• Stake amount: 1.52 million SOL
• TVL: $108 million
• staking yield: 6.232%
• Staking volume growth over the past 30 days: 177%

Blaze's governance token is BLZE, with a total market value of 38.84 million dollars.

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 on Solana. By staking SOL in Lido, users can receive stSOL.

• Stake Amount: 887,000 SOL
• TVL: $63.4 million
• Stake Yield: 6.717%
• Changes in staking volume over the past 30 days: decreased by 41.43%

Lido's governance token is LDO, with a circulating market cap of $2.095 billion and a total market cap of $2.356 billion.

The Application 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, and bSOL as collateral for lending, but stSOL has been delisted.

In Orca, the largest DEX on Solana, both mSOL/SOL and bSOL/SOL have liquidity exceeding ten million dollars, and there is also a direct trading pair between mSOL and bSOL; while the liquidity for Jito/SOL and stSOL/SOL is relatively low.

The growth of staking volume and liquidity in DEX may be related to the project's incentive measures. Blaze offers the highest incentives, with a 15.37% APR BLZE governance token subsidy for deposits in Solend, and a 1.98% APR MNDE governance token subsidy for mSOL deposits. Jito has not yet incentivized the adoption of JitoSOL in DeFi, while Lido's tokens have been mostly distributed, leaving it unable to provide further incentives and opting to exit the market.

Summary

The Solana ecosystem includes various representative liquid staking solutions, all supported by DeFi projects within the ecosystem. Marinade was the first to launch and offers native staking services; Jito provides higher yields through MEV infrastructure; BlazeStake allows users to stake SOL to specific validators; Lido is a representative of multi-chain liquid staking service providers.

However, the total amount of liquid staking is relatively small, with SOL staked through the staking pool accounting for only 4.3% of all staked SOL. The existence of multiple liquidity solutions has also led to the dispersion of liquidity, and more competitive solutions may emerge in the future.

Incentives seem to be crucial for the increase in staking volume and the liquidity of LST in DEX. Although the Blaze project is the least known, it has provided the highest APR subsidies in DEX and lending protocols, with a 177% increase in staking volume over the past 30 days. In contrast, Lido, despite being the most well-known in the liquid staking space and having launched on Solana relatively early, has chosen to shut down due to the fact that its tokens have almost all been distributed and it is unable to participate in the subsidy battle.