Analysis of the Depth of the Solana Liquid Staking Market: A Comparison of Four Major Market Maker Projects

With the recovery of the cryptocurrency market, Solana (SOL) has risen to become the sixth largest crypto asset globally, with its stake size ranking second among all Proof of Stake (PoS) blockchains, second only to Ethereum. However, 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, which is only 11.3% of its historical peak.

In the composition of Solana's TVL, liquid staking projects play a key role and are an important force driving the rebound of TVL. Among them, Marinade and Jito dominate with the highest TVL, highlighting the significance of the liquid staking category. This article will delve into the core participants in the Solana liquid staking space and conduct a comparative analysis of their strategies and market performance.

Overview of Solana Staking Market

As of December 12, the market capitalization of SOL reached $30.53 billion, with a staking market value of $27.62 billion, a staking ratio of up to 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; its staking ratio is also at a relatively high level among the leading PoS public chains by market capitalization.

The Solana network has a total of 1986 validators, with the top-ranked validators offering an annual percentage yield (APY) of nearly 8%, with no commission required.

To incentivize SOL holders and enhance network security and censorship resistance, the Solana ecosystem has launched the "staking pool program". Users can deposit SOL into the staking pool to receive SPL tokens that represent their share, known as liquid staking tokens (LST), which can circulate freely. Currently, the staking pool has locked 16.82 million SOL, accounting for 4.3% of the total staking amount, with an average APY of 6.68%.

Analysis of the Four Major Liquid Staking Projects

1. Marinade Finance

As the earliest liquid staking protocol in the Solana ecosystem, Marinade Finance was launched on the mainnet in August 2021. Users can stake SOL to receive mSOL, and the staking rewards are directly accumulated into mSOL.

Features:

• Provide native stake services to earn staking rewards without the need for smart contracts.
• The staking volume is 7.058 million SOL, making it the largest liquid staking project on Solana.
• TVL reached 777 million USD, ranking first in the Solana ecosystem.
• stake yield 6.543%
• The staking volume has increased by 31.22% in the last 30 days.

Governance Token MNDE:

• Circulating market cap of 85.99 million USD
• Total market cap is $356 million
• Increase of 22.2% in the last 7 days

2. Jito

Jito launched its liquid staking platform at the end of 2022, where users can stake SOL to receive JitoSOL, with earnings accumulating directly.

Features:

• Develop MEV infrastructure for the Solana network, with a portion of MEV profits distributed to JitoSOL holders.
• stake volume 6.38 million SOL
• TVL 455 million USD
• Stake yield of 6.892%, higher than other projects.
• The staking volume has increased by 17.77% in the last 30 days.

Governance token JTO:

• Circulating market value of 342 million USD
• Total market cap is $2.973 billion
• 46.6% increase in the last 7 days

3. BlazeStake

BlazeStake was launched in May 2022 and has rapidly risen to become the third largest liquid staking project due to the explosion of the Solana ecosystem. Users can stake SOL to receive bSOL.

Features:

• Use the official Solana Labs staking pool smart contract
• Have the largest validator set
• Allow users to liquid stake to specific validators
• stake amount 1.52 million SOL
• TVL 108 million USD
• stake yield 6.232%
• The staking volume has increased significantly by 177% in the last 30 days.

Governance Token BLZE:

• Total market value of 38.84 million USD
• Increase of 66.5% in the last 7 days

4. Lido

Lido launched its liquid staking service on Solana in September 2021, allowing users to stake SOL to receive stSOL.

Current Situation:

• Announced in October to stop accepting new stake on Solana.
• A staking volume of 887,000 SOL, a decrease of 41.43% in the past 30 days.
• The TVL on Solana is $63.4 million.
• stake yield of 6.717%

Governance token LDO:

• Circulating market cap is 2.095 billion USD
• Total market capitalization is 2.356 billion USD
• Down 6.7% in the last 7 days

The Application of LST in DeFi

LSTs of various projects are widely supported in the Solana DeFi ecosystem:

• Lending Protocols: marginfi and Solend support mSOL, JitoSOL, bSOL as collateral.
• DEX: The liquidity of mSOL/SOL and bSOL/SOL on Orca exceeds ten million dollars.

Incentives have a significant impact on the growth of staking volume and the liquidity of LST:

• Blaze offers the highest incentives, with a 15.37% APR BLZE subsidy for deposits in Solend.
• Marinade provides a 1.98% APR MNDE subsidy for mSOL deposits.
• Jito has not yet incentivized the application of JitoSOL in DeFi.
• Lido has chosen to exit the market due to the nearing completion of token distribution and the inability to continue incentivizing.

Summary

There are various representative liquid staking solutions in the Solana ecosystem, each with its own characteristics: Marinade is the earliest and offers native staking; Jito provides higher returns through MEV infrastructure; BlazeStake supports staking for specific validators; Lido represents a multi-chain liquid staking service.

However, the total amount of liquid staking is still relatively small, accounting for only 4.3% of all staked SOL. The diverse solutions have also led to liquidity being dispersed, and more competitive new solutions may emerge in the future.

Incentives remain a key factor driving the growth of staking volume and LST liquidity. Blaze achieves rapid growth through high subsidies, while Lido chooses to exit the Solana market due to its inability to participate in the incentive competition.