In-depth Analysis of the Solana Ecosystem Liquid Staking Market Depth

Recently, with the market warming up, Solana (SOL) has jumped to sixth place in the cryptocurrency market capitalization ranking. Among all Proof of Stake (PoS) blockchains, Solana's staked assets are second only to Ethereum. However, compared to its market position, the concentration of funds in decentralized finance (DeFi) applications within the Solana ecosystem is relatively low, with a total locked value (TVL) of 1.137 billion USD, which is only 11.3% of its historical peak.

In the composition of TVL on Solana, liquid staking projects play an important role, serving as key factors in driving TVL back to historical highs. Among them, Marinade and Jito occupy significant positions 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.

Stake and Liquid Staking Overall Situation

According to data statistics, as of December 12, the market capitalization of SOL is $30.53 billion, with a staked market cap of $27.62 billion, a staking ratio of 69.18%, and a staking amount of 391 million SOL. The inflation rate is 6.75%, and the reward rate is 6.87%. Among them, the staked market cap of SOL ranks second among all PoS public chains, second only to ETH; the staking ratio is also relatively high among the top PoS public chains by market cap.

There are a total of 1986 validators in the Solana network, with the top-ranked validators offering an APY close to 8%, and no commission is required.

To reward SOL holders and increase the network's security and censorship resistance, the Solana Foundation has launched the "staking pool program," allowing users to deposit SOL into staking pools and receive SPL tokens that represent their share in the staking pool. These SPL tokens are liquid staking tokens (LST) that can circulate freely. Data shows that 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 staking amount. The top 4 staking pools are Marinade, Jito, BlazeStake, and Lido, which are also the largest 4 liquid staking projects in the Solana ecosystem.

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, you receive mSOL, and the staking rewards are directly accumulated into mSOL.

Unlike other projects, Marinade also offers native stake services, allowing users to earn staking rewards without the use of smart contracts.

Marinade has 7.058 million SOL staked, making it the largest staking project in terms of staked amount on Solana; it is also the project with the highest TVL on Solana, valued at $777 million; the staking yield is 6.543%; the staked amount has increased by 31.22% over the past 30 days.

The governance token of Marinade is MNDE, with a circulating market value of 85.99 million USD, a total market value of 356 million USD, and an increase of 22.2% over the past 7 days.

Jito

Jito launched its liquid staking platform at the end of 2022. By staking SOL in Jito, users can receive JitoSOL, and the staking rewards are directly accumulated into JitoSOL.

Jito has developed Maximum Extractable Value (MEV) infrastructure for the Solana network, including the Jito Solana client, Jito Bundles, Jito Block Engine, and MEV distribution system. Due to its own MEV operations, a portion of the MEV earnings will be allocated to JisoSOL, making the returns for users staking through Jito relatively higher.

Jito has 6.38 million SOL staked; the staking volume has increased by 17.77% over the past 30 days; the TVL is 455 million dollars; the staking yield is 6.892%.

Jito's governance token is JTO, with a circulating market cap of 342 million dollars, a total market cap of 2.973 billion dollars, and an increase of 46.6% over the past 7 days.

BlazeStake

BlazeStake was launched in May 2022, and recently due to the collective explosion of the Solana ecosystem, its governance token has risen dozens of times from its low point, surpassing Lido to become the 3rd largest liquid staking project on Solana. By staking SOL in BlazeStake, users can receive bSOL, and the staking rewards are directly accumulated into bSOL.

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

BlazeStake has 1.52 million SOL staked; the staking amount has increased by 177% over the past 30 days; the TVL is 108 million dollars; the staking yield is 6.232%.

Blaze's governance token is BLZE, with a total market value of 38.84 million USD, up 66.5% in the past 7 days.

Lido

Lido launched its liquid staking service on Solana in September 2021, but its development on Solana has not been ideal, failing to seize the first-mover advantage and brand advantage. Lido announced in October that it would stop accepting new stakes on Solana. Staking SOL in Lido can yield stSOL, and the staking rewards are also accumulated in stSOL.

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

Lido's governance token is LDO, with a circulating market cap of $2.095 billion, a total market cap of $2.356 billion, and a decline of 6.7% over the past 7 days.

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, bSOL, and stSOL as collateral for lending, but after Lido announced its exit, stSOL has been delisted by these two projects.

In the largest DEX Orca on Solana, both mSOL/SOL and bSOL/SOL have over ten million dollars in liquidity, and there are trading pairs available for direct trading between mSOL and bSOL; while the liquidity for Jito/SOL and stSOL/SOL is relatively low.

The growth in staking volume and liquidity in DEX may be related to the project's incentive measures. Blaze offers the highest incentives, providing an APR of 15.37% in BLZE governance token subsidies for deposits in Solend, and an APR of 1.98% in MNDE governance token subsidies for mSOL deposits. Jito has yet to incentivize the adoption of JitoSOL in DeFi, while Lido's tokens have mostly been distributed, leaving them unable to provide further incentives and opting to exit the market.

Summary

The Solana ecosystem includes a variety of 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 with specific validators; Lido is a representative of multi-chain liquid staking service providers.

However, the total amount of liquid staking is relatively small, with only 4.3% of all staked SOL being staked through staking pools. The abundance of liquidity solutions has also led to a dispersion of liquidity, and some competitive solutions may emerge in the future, such as marginfi's LST.

Incentives seem to remain 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 staking volume increasing by 177% over the past 30 days. In contrast, Lido, despite being the most prominent in the liquid staking sector and having launched early on Solana, has chosen to shut down due to being unable to participate in the subsidy war since almost all of its tokens have been distributed.