The Four Major Players in Liquid Staking within the Solana Ecosystem

With the recovery of the cryptocurrency market, Solana (SOL) has risen to the sixth largest cryptocurrency position. In the proof-of-stake (PoS) based blockchain, Solana's staked assets scale is second only to Ethereum. However, compared to its market position, the concentration of funds in decentralized finance (DeFi) applications within the Solana ecosystem is relatively low, with a total value locked (TVL) of $1.137 billion, only 11.3% of its historical peak.

In Solana's TVL, liquid staking projects play an important role and are key to 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.

Solana staking overview

According to the data, 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%, a staked amount of 391 million SOL, an inflation rate of 6.75%, and a reward rate of 6.87%. The staked market value of SOL ranks second among all PoS public chains, second only to ETH; the staking ratio is also relatively high among the PoS public chains with higher market capitalization.

There are a total of 1986 validators in Solana, with the top-ranking validators offering an APY close to 8%, all without commission. To reward SOL holders and increase the network's security and censorship resistance, the Solana Foundation launched the "staking pool program," allowing users to deposit SOL into the staking pool and receive SPL tokens representing their shares in the staking pool, namely liquid staking tokens (LST).

Data shows that a total of 16.82 million SOL is locked in the staking pool, with an average APY of 6.68%. The SOL in the staking pool accounts for approximately 4.3% of the total staking 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: Pioneer in the Ecosystem

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, with staking rewards directly accumulating into mSOL. Unlike other projects, Marinade also offers native staking services, allowing users to earn staking rewards without using smart contracts.

Marinade currently has 7.058 million SOL staked, making it the largest liquid staking project on Solana in terms of staked amount, as well as the project with the highest TVL, valued at $777 million. The staking yield is 6.543%, and the staked amount has increased by 31.22% over the past 30 days.

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

Jito: The Innovator of MEV Integration

Jito launched its liquid staking platform at the end of 2022. Users can stake SOL in Jito to earn JitoSOL, with staking rewards directly accumulating in JitoSOL. What sets Jito apart is its development of 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 operations, a portion of MEV earnings is allocated to JitoSOL, resulting in relatively higher returns for users staking through Jito.

Jito has currently staked 6.38 million SOL, with a 17.77% increase over the past 30 days, a TVL of $455 million, and a staking yield of 6.892%.

The circulating market value of Jito's governance token JTO is $342 million, with a total market value of $2.973 billion, having increased by 46.6% in the past 7 days.

BlazeStake: Rising Star

BlazeStake was launched in May 2022 and has rapidly developed recently due to the collective explosion of the Solana ecosystem, surpassing Lido to become the third largest liquid staking project on Solana. Users can stake SOL in BlazeStake to receive bSOL, and the staking rewards are directly accumulated into bSOL.

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

BlazeStake currently has 1.52 million SOL staked, a growth of 177% over the past 30 days, with a TVL of $108 million and a staking yield of 6.232%.

The total market capitalization of BlazeStake's governance token BLZE is $38.84 million, having increased by 66.5% in the past 7 days.

Lido: The Exit of a Multi-Chain Giant

Lido launched its liquid staking service on Solana in September 2021, but its development on Solana has not been ideal, failing to leverage its first-mover advantage and brand advantage. Lido announced in October that it would stop accepting new stakes on Solana. Users staking SOL in Lido can receive stSOL, and the staking rewards are also accumulated in stSOL.

Lido has currently staked 887,000 SOL on Solana, a decrease of 41.43% over the past 30 days, with a TVL of $63.4 million and a staking yield of 6.717%.

The circulating market cap of Lido's governance token LDO is $2.095 billion, with a total market cap of $2.356 billion, down 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 these LST as collateral for lending, but after Lido announced its exit, 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 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, 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 not yet incentivized the adoption of JitoSOL in DeFi, while Lido's tokens have already been largely 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 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 staking pools. The numerous liquidity schemes have also led to a dispersion of liquidity, and in the future, some competitive schemes may emerge, such as marginfi's LST.

Incentives seem to remain crucial for the increase in staking volume and the liquidity of LST in DEXs. Although the Blaze project has the smallest reputation, it has offered the highest APR subsidies in DEX and lending protocols, with staking volume increasing by 177% in the past 30 days. In contrast, even though Lido has the largest reputation in the liquid staking domain and launched on Solana relatively early, it has chosen to shut down due to being unable to participate in the subsidy war as almost all tokens have been distributed.