New Landscape of the Solana Staking Market: Four Giants in the Liquid Staking Field

Recently, the market has warmed up, and Solana (SOL) has jumped to the sixth position in the cryptocurrency market capitalization ranking. Among all proof-of-stake (PoS) blockchains, its staking asset scale is second only to Ethereum. However, the degree of capital accumulation 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 peak.

In the composition of Solana's TVL, liquid staking projects play a crucial role and are seen as key factors in driving the TVL back to historical 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 key players in the Solana liquid staking space and conduct a comparative analysis of their strategies and market performance.

Stake and Liquid Staking Overall Situation

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 total 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, only behind 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, with the top-ranked validators offering an APY close to 8%, all without commission.

In order to reward SOL holders and enhance the network's security and resistance to censorship, the Solana Foundation has launched the "staking pool program." Users can deposit SOL into the staking pool and receive SPL tokens representing their share in the staking pool, namely liquid staking tokens (LST). These LST can circulate freely. Currently, a total of 16.82 million SOL is locked in the staking pool, with an average APY of 6.68%, accounting 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.

Marinade Finance

Marinade Finance is one of the earliest liquid staking protocols in the Solana ecosystem, launched on the Solana mainnet in August 2021. Staking SOL on Marinade earns 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 using any smart contracts.

Marinade has 7.058 million SOL staked, making it the largest liquid staking project by 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% in the past 30 days.

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

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 in JitoSOL.

Jito's uniqueness lies in the development of Maximum Extractable Value (MEV) infrastructure for the Solana network, including the Jito Solana client, Jito Bundles, Jito Block Engine, and MEV allocation system. Due to its own MEV operations, a portion of the MEV revenue is allocated to JisoSOL, making the returns for users staking through Jito relatively higher.

There are 6.38 million SOL staked in Jito; the staking amount has increased by 17.77% in the past 30 days; the TVL is $455 million; the staking 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, having increased by 46.6% in the past 7 days.

BlazeStake

BlazeStake was launched in May 2022 and has rapidly developed 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, and the staking rewards are directly accumulated into bSOL.

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

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

The governance token of Blaze is BLZE, with a total market value of $38.84 million, having increased by 66.5% in the past 7 days.

Lido

Lido launched its liquid staking service on Solana in September 2021. While Lido dominates liquid staking for ETH, its development on other chains has not been ideal. Lido announced in October that it would stop accepting new stakes on Solana. Staking SOL in Lido can yield stSOL, and the staking rewards also accumulate to stSOL.

Lido has 887,000 SOL staked; the staking volume has decreased by 41.43% in 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, and bSOL as collateral for lending, but stSOL has been delisted by both 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 for mSOL and bSOL that can be traded directly; while the Liquidity for Jito/SOL and stSOL/SOL is relatively low.

The increase in staking volume and liquidity in DEX may be related to the project's incentive measures. Blaze offers the highest incentives, with 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 been almost entirely distributed, making it unable to provide further incentives and choosing 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 only 4.3% of all staked SOL being staked through the staking pool. The presence of multiple liquidity schemes has also contributed to the dispersion of liquidity, and in the future, some competitive schemes may emerge.

Incentives seem to be crucial for increasing the amount staked and the liquidity of LST in DEXs. Although the Blaze project is the least known, it offers the highest APR subsidies in DEX and lending protocols, with a 177% increase in staking volume over the past 30 days. In contrast, Lido, although the most well-known in the liquid staking field and having launched on Solana relatively early, has chosen to shut down due to being unable to participate in the subsidy battle as nearly all of its tokens have been issued.