Solana Stake Market Depth Analysis: Four Giants of Liquid Staking

With the market recovering, Solana (SOL) has risen to become the sixth largest cryptocurrency, with its stake assets scale second only to Ethereum among all proof-of-stake (PoS) blockchains. However, the capital aggregation of decentralized finance (DeFi) applications in 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 TVL of Solana, liquid staking projects play an important role and are key to the recovery of TVL. 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 Solana liquid staking space and conduct a comparative analysis of their strategies and market performance.

stake and liquid staking Overview

As of December 12, the market capitalization of SOL is $30.53 billion, with a staking market value 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%. The staking market value of SOL ranks second among all PoS public chains, only behind ETH; the staking ratio is also relatively high among the PoS public chains with higher market capitalizations.

Solana has a total of 1986 validators, and the top-ranked validators offer an APY close to 8%, all with no commission.

In order to reward SOL holders, increase network security and censorship resistance, the Solana Foundation has launched the "staking pool program". Users can deposit SOL into the staking pool and receive SPL tokens representing their share, namely the liquid staking token (LST), which can circulate freely. 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. By staking SOL on Marinade, users receive mSOL, and staking rewards are directly accumulated in mSOL. Marinade also offers native staking services, allowing users to earn staking rewards without using smart contracts.

Marinade has 7.058 million SOL staked, making it the largest liquid staking project on Solana; the TVL is $777 million, ranking first on Solana; the staking yield is 6.543%; the amount staked has increased by 31.22% over the past 30 days.

The governance token of Marinade is MNDE, with a circulating market cap of 85.99 million USD, a total market cap 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 earn JitoSOL, and the staking rewards are directly accumulated into JitoSOL. Jito has developed infrastructure for the Solana network to maximize extractable value (MEV), with a portion of the MEV rewards being distributed to JitoSOL, making the returns for users staking through Jito relatively higher.

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

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

BlazeStake

BlazeStake was launched in May 2022 and has recently experienced rapid growth 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 obtain bSOL, and the staking rewards are directly accumulated into bSOL.

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

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

The governance token of BlazeStake is BLZE, with a circulating market cap not disclosed, and a total market cap of 38.84 million USD, having increased by 66.5% in the past 7 days.

Lido

Lido launched its liquid staking service on Solana in September 2021, but the 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 earn stSOL, and the staking rewards are likewise accumulated into 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 and a total market cap of $2.356 billion, down 6.7% in the past 7 days.

The Application of LST in DeFi

Marinade's mSOL, Jito's JitoSOL, Blaze's bSOL, and Lido's stSOL are well-supported in Solana's DeFi applications. The two largest lending protocols on Solana, marginfi and Solend, both support these LSTs as collateral for lending, but stSOL has been delisted.

In the largest DEX Orca on Solana, both mSOL/SOL and bSOL/SOL have over ten million dollars in Liquidity, and there are also trading pairs between mSOL and bSOL that can be traded directly; 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 in BLZE governance token subsidies for deposits in Solend, and a 1.98% APR in MNDE governance token subsidies for mSOL deposits. Jito has not yet provided incentives for the adoption of JitoSOL in DeFi, while Lido's tokens have mostly been distributed, making it unable to provide further incentives and choosing 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 low, with the SOL staked through the staking pool accounting for only 4.3% of all staked SOL. The presence of multiple liquidity schemes has also led to a dispersion of liquidity, and in the future, some competitive schemes may emerge.

Incentives seem to remain crucial for the increase in staking volume and the liquidity of LST on DEX. Although the Blaze project has the least fame, 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, although the most well-known in the field of liquid staking and having launched early on Solana, has chosen to shut down due to the fact that almost all of its tokens have been distributed and it is unable to participate in the subsidy competition.