Solana Staking Ecosystem Analysis: Key Players in the Liquid Staking Field

With the market warming up, Solana (SOL) has jumped to become the sixth largest cryptocurrency. Among all blockchains based on Proof of Stake (PoS), its staking asset scale is second only to Ethereum, ranking second. However, compared to its market position, the degree 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 peak.

In Solana's TVL, liquid staking projects are particularly important and are key to driving the TVL back to historical highs. Among them, Marinade and Jito hold significant positions 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 provide a comparative analysis of their strategies and market performance.

Staking 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 staked 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, second only to ETH; the staking ratio is also relatively high among the top market capitalization PoS public chains.

Solana has a total of 1986 validators, with the top-ranking validators offering an APY close to 8%, all without commission.

To reward SOL holders and enhance network security and censorship resistance, the Solana Foundation has launched the "Stake Pool Program." Users can deposit SOL into the stake pool and receive SPL tokens representing their share in the stake pool, namely the liquid staking token (LST), which can circulate freely. A total of 16.82 million SOL is locked in the stake pool, providing an average APY of 6.68%. The SOL in the stake pool accounts for approximately 4.3% of the total staked amount. The top four stake pools are Marinade, Jito, BlazeStake, and Lido, which are also the four largest liquid staking projects in the Solana ecosystem.

Main Participant 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. Users can stake SOL on Marinade to receive mSOL, and staking rewards are directly accumulated in mSOL.

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

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

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

Jito

Jito launched its liquid staking platform at the end of 2022. Users can stake SOL on Jito to earn JitoSOL, with staking rewards directly accumulating into JitoSOL.

Jito has developed the 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 business, a portion of the MEV earnings will be distributed to JisoSOL, making the returns for users staking through Jito relatively higher.

There are 6.38 million SOL staked in Jito; the staking volume has increased by 17.77% in the past 30 days; 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 recently seen rapid growth due to the collective explosion of the Solana ecosystem, surpassing Lido to become the 3rd largest liquid staking project on Solana. Users can stake SOL on BlazeStake to receive bSOL, with staking rewards accumulating directly in bSOL.

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

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

The governance token of BlazeStake 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. Although 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. Users staking SOL on Lido can receive stSOL, and the staking rewards are also accumulated into 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 value of $2.095 billion, a total market value of $2.356 billion, and a 6.7% decrease 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 DeFi applications on Solana.

The two largest lending protocols on Solana, marginfi and Solend, support mSOL, JitoSOL, and bSOL as collateral for loans, but after Lido announced its exit, stSOL has been delisted by both projects.

On the largest DEX Orca on Solana, both mSOL/SOL and bSOL/SOL have a liquidity of over ten million dollars, and there are also trading pairs between mSOL and bSOL that can be traded directly; while the liquidity of 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, providing an APR of 15.37% in BLZE governance token subsidies for deposits in Solend, while mSOL deposits earn an APR of 1.98% in MNDE governance token subsidies. Jito has not yet provided incentives for the adoption of JitoSOL in DeFi, and Lido's tokens have basically been fully distributed, leaving them 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 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 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 the dispersion of liquidity, and it is possible that some competitive schemes will emerge in the future.

Incentives seem to remain crucial for increasing the 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 field of liquid staking 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 tokens have already been issued.