Solana Liquid Staking Market Depth Analysis: Strategies and Performances of the Four Major Participants

As the cryptocurrency market warms up, Solana (SOL) has risen to become the sixth largest crypto asset by market capitalization, with its stake assets ranking second only to Ethereum among all proof-of-stake (PoS) blockchains. However, the total locked value (TVL) of decentralized finance (DeFi) applications in the Solana ecosystem is relatively low, at only 11.3% of its historical peak, approximately $1.137 billion.

In the DeFi ecosystem of Solana, liquid staking projects play an important role and are a key factor in driving the recovery of TVL. 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 main participants in the Solana liquid staking space and conduct a comparative analysis of their strategies and market performance.

Solana Stake Market Overview

As of December 12, the market capitalization of SOL is $30.53 billion, with a stake market capitalization of $27.62 billion, a stake ratio of 69.18%, a staked amount of 391 million SOL, an inflation rate of 6.75%, and a reward rate of 6.87%. The stake market capitalization of SOL ranks second among all PoS public chains, second only to ETH; the stake ratio is also relatively high among PoS public chains with higher market capitalizations.

The Solana network has a total of 1986 validators, with the top-ranked validators offering an annualized yield of (APY) close to 8%, with no commission required. To incentivize SOL holders and enhance network security, the Solana Foundation launched the "stake pool program." Data shows that a total of 16.82 million SOL is locked in the stake pool, accounting for approximately 4.3% of the total staked amount, with an average APY of 6.68%.

Analysis of the Four Major Liquid Staking Projects

1. Marinade Finance

As one of the earliest liquid staking protocols in the Solana ecosystem, Marinade Finance launched on the mainnet in August 2021. Users can stake SOL in Marinade to receive mSOL, and the staking rewards are directly accumulated into mSOL. It is worth noting that Marinade also offers native staking services, allowing users to earn staking rewards without using smart contracts.

• Staked Amount: 7.058 million SOL (the most in liquid staking projects)
• TVL: $777 million (highest in Solana ecosystem)
• stake yield: 6.543%
• 30-day stake volume growth: 31.22%
• Governance Token: MNDE (Circulating Market Cap: $85.99 million, Total Market Cap: $356 million)

2. Jito

Jito launched its liquid staking platform at the end of 2022, allowing users to stake SOL to earn JitoSOL. What makes Jito unique is its development of the maximum extractable value (MEV) infrastructure for the Solana network, including the Jito Solana client, Jito Bundles, and Jito Block Engine. Since a portion of the MEV earnings is distributed to JitoSOL, Jito users' staking returns are relatively higher.

• Stake amount: 6.38 million SOL
• TVL: $455 million
• Stake yield: 6.892%
• 30-day stake volume growth: 17.77%
• Governance Token: JTO (Circulating Market Cap $342 million, Total Market Cap $2.973 billion)

3. BlazeStake

BlazeStake was launched in May 2022 and has rapidly developed due to the overall performance of the Solana ecosystem, becoming the third largest liquid staking project. By staking SOL on BlazeStake, users can obtain bSOL. This project primarily utilizes the official staking pool smart contract from Solana Labs, featuring the largest set of validators, allowing users to liquid stake to specific validators.

• Stake Amount: 1.52 million SOL
• TVL: $108 million
• stake yield: 6.232%
• 30-day stake volume growth: 177%
• Governance Token: BLZE (Total Market Cap $38.84 million)

4. Lido

Lido launched liquid staking services on Solana in September 2021, allowing users to stake SOL to receive stSOL. Although Lido dominates liquid staking on Ethereum, its development on Solana has been less than ideal. The project announced in October that it would stop accepting new stakes on Solana.

• Stake Amount: 887,000 SOL
• TVL: 63.4 million USD
• stake yield: 6.717%
• 30-day stake volume change: -41.43%
• Governance Token: LDO (Circulating Market Cap $2.095 billion, Total Market Cap $2.356 billion)

The Application of LST in DeFi

The liquid staking tokens (LST) of various projects have received wide support in Solana's DeFi applications:

• Lending Protocols: marginfi and Solend support mSOL, JitoSOL, bSOL as collateral.
• DEX: In Orca, both mSOL/SOL and bSOL/SOL have over ten million dollars in Liquidity.
• Incentives: Blaze offers the highest incentives, Marinade follows, Jito has not yet provided incentives for the adoption of JitoSOL in DeFi, while Lido has exited the market due to the nearing completion of token distribution.

Summary

Liquid staking projects in the Solana ecosystem each have their own characteristics, but the overall staking volume is still relatively low. Incentives seem to be crucial for the growth of staking volume and the application of LST in DeFi, as seen from Blaze's rapid growth and Lido's exit. In the future, more innovative solutions may emerge in the Solana liquid staking market, such as marginfi's LST, further promoting the development of the ecosystem.