Solana Staking Market: Analysis of the Four Strongholds in the Liquid Staking Sector

As the market warms up, Solana (SOL) has jumped to the sixth largest cryptocurrency, with its staked assets ranking second among all proof-of-stake (PoS) blockchains, only behind Ethereum. However, 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, only 11.3% of its historical peak.

In Solana's TVL, liquid staking projects play a key role and are expected to drive the TVL back to historical highs. Among them, Marinade and Jito hold leading 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 conduct a comparative analysis of their strategies and market performance.

Staking and Liquid Staking Overview

As of December 12, the market cap of SOL is $30.53 billion, with a staked market cap 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 staked market cap 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 caps.

The Solana network has a total of 1986 validators, with the top-ranked validators offering an APY close to 8%, all without any commissions.

To reward SOL holders and increase the network's security and censorship resistance, the Solana Foundation has launched the "staking pool program," allowing users to deposit SOL into staking pools and receive SPL tokens that represent their share in the staking pool. These SPL tokens are liquid staking tokens (LST) and can be freely circulated. A total of 16.82 million SOL is locked in the staking pool, providing an average APY of 6.68%, which accounts for about 4.3% of the total staked amount. The top four staking pools are Marinade, Jito, BlazeStake, and Lido.

Marinade Finance

Marinade Finance is one of the earliest liquid staking protocols in the Solana ecosystem, launched on the Solana mainnet in August 2021. Staking SOL on Marinade yields mSOL, and staking rewards are directly accumulated in mSOL.

Marinade also provides native staking services, allowing users to earn staking rewards without using smart contracts. Currently, there are 7.058 million SOL staked in Marinade, making it the largest staking project by staked amount on Solana; the TVL is $777 million, ranking first on Solana; the staking yield is 6.543%; and the staking amount 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 and a total market cap of 356 million USD.

Jito

Jito launched its liquid staking platform at the end of 2022. In Jito, staking SOL can yield JitoSOL, and the staking rewards are directly accumulated into JitoSOL.

Jito has developed Maximum Extractable Value (MEV) infrastructure for the Solana network, including the client Jito Solana, Jito Bundles, the blockchain builder Jito Block Engine, and the MEV distribution system. Due to its own MEV business, a portion of the MEV revenue will be allocated to JisoSOL, making the earnings for users staking through Jito relatively higher.

Jito has 6.38 million SOL staked; 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.

BlazeStake

BlazeStake was launched in May 2022 and has rapidly developed 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 receive bSOL, and the staking rewards are directly accumulated into bSOL.

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

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

The governance token of Blaze is BLZE, with a total market value of 38.84 million dollars.

Lido

Lido launched its liquid staking service on Solana in September 2021, but the development was not ideal, and it announced in October that it would stop accepting new stakes on Solana. Staking SOL in Lido can yield stSOL, and staking rewards accumulate in stSOL.

Lido has 887,000 SOL staked; the staking amount 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 cap of $2.095 billion and a total market cap of $2.356 billion.

The Application of LST in DeFi

Marinade's mSOL, Jito's JitoSOL, Blaze's bSOL, and Lido's stSOL have received good support in Solana's DeFi applications.

The two largest lending protocols on Solana, marginfi and Solend, both support mSOL, JitoSOL, and bSOL as collateral for borrowing, but stSOL has been delisted by both projects.

In Orca, the largest DEX on Solana, both mSOL/SOL and bSOL/SOL have liquidity exceeding ten million dollars, and there are also trading pairs available for direct trading between mSOL and bSOL; meanwhile, the liquidity of Jito/SOL and stSOL/SOL is relatively lower.

The increase in 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 subsidy in BLZE governance tokens for deposits in Solend, and a 1.98% APR subsidy in MNDE governance tokens for mSOL deposits. Jito has not yet incentivized the adoption of JitoSOL in DeFi, while Lido's tokens have already been almost fully distributed, leaving it unable to provide further incentives and choosing to exit the market.

Summary

The Solana ecosystem includes various representative liquid staking solutions, all of which are supported by DeFi projects in 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 abundance of liquidity solutions has also led to the dispersion of liquidity, and in the future, some competitive solutions may emerge, such as marginfi's LST.

Incentives are still crucial for increasing the amount staked and the liquidity of LST in DEX. Although the Blaze project has the smallest reputation, 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 having the largest reputation in the field of liquid staking and launching on Solana earlier, has chosen to shut down because it is unable to participate in the subsidy battle as its tokens have almost all been distributed.