Analysis of Solana Staking Market Depth: The Four Giants in the Liquid Staking Field

As the market warms up, Solana (SOL) has risen to become the sixth largest cryptocurrency by market capitalization. Among all Proof of Stake (PoS) based blockchains, its staked assets are second only to Ethereum. However, compared to its market position, the level of capital accumulation 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 a key role and are an important force in driving the TVL back to historical highs. In this field, Marinade and Jito occupy significant positions with the highest TVL, highlighting the importance of the liquid staking category. This article will delve into the important participants in the liquid staking field on Solana and conduct a comparative analysis of their strategies and market performance.

Stake and Liquid Staking Overall Situation

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%, and a staked amount of 391 million SOL. The inflation rate is 6.75%, and the reward rate is 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 higher market capitalization PoS public chains.

There are a total of 1986 validators in Solana, with the top-ranked validators offering an APY close to 8%, all without any commission.

To reward SOL holders and enhance the network's security and censorship resistance, the Solana Foundation has launched the "staking pool program," allowing users to deposit SOL into the staking pool and receive SPL tokens that represent their share in the staking pool. These SPL tokens are liquid staking tokens (LST) and can circulate freely. 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 about 4.3% of the total staked amount. The top four staking pools are Marinade, Jito, BlazeStake, and Lido, which are the four largest liquid staking projects in the Solana ecosystem.

Marinade Finance

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

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

Marinade has 7.058 million SOL staked, making it the liquid staking project with the highest stake on Solana; it is also the project with the highest TVL on Solana, valued at $777 million; the staking yield is 6.543%; 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, a total market cap of $356 million, and a 22.2% increase over the past 7 days.

Jito

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

Jito has developed maximum extractable value (MEV) infrastructure for the Solana network, including the Jito Solana client, Jito Bundles, the blockchain builder Jito Block Engine, and the MEV distribution system. Due to its own MEV business, a portion of the MEV earnings will be allocated to JisoSOL, so users staking through Jito will have relatively higher returns.

There are 6.38 million SOL staked in Jito; the staking amount has increased by 17.77% in the past 30 days; the TVL is $455 million; the staking yield is 6.892%.

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

BlazeStake

BlazeStake was launched in May 2022 and has rapidly grown recently 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 mainly uses the official staking pool smart contract from Solana Labs, has the largest set of validators, and allows users to liquid stake to specific validators.

BlazeStake has staked 1.52 million SOL; the staking volume has grown 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 USD, up 66.5% in the past 7 days.

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 the staking rewards are also accumulated in 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 cap of $2.095 billion, a total market cap of $2.356 billion, and a 6.7% decrease 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 mSOL, JitoSOL, and bSOL as collateral for lending, but stSOL has been delisted.

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 between mSOL and bSOL that can be traded directly; while the liquidity for Jito/SOL and stSOL/SOL is relatively low.

The increase in staking volume and liquidity in DEXs may be related to the project's incentive measures. Blaze offers the highest incentives, with deposits in Solend receiving a subsidy of 15.37% APR in BLZE governance tokens, and deposits in mSOL receiving a subsidy of 1.98% APR in MNDE governance tokens. Jito has not yet provided incentives for the adoption of JitoSOL in DeFi, and Lido's tokens have already been mostly distributed, rendering them 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 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 SOL staked through staking pools accounting for only 4.3% of all staked SOL. The abundance of liquidity solutions has also led to the dispersion of liquidity, and some competitive solutions may emerge in the future.

Incentives seem to still be crucial for increasing the staking volume and the liquidity of LST in DEX. The Blaze project has the least fame, but it offered the highest APR subsidies in DEX and lending protocols, with staking volume increasing by 177% over the past 30 days. Lido, despite having the highest fame in the field of liquid staking and launching early on Solana, has almost fully distributed its tokens and is unable to participate in the subsidy battle, choosing instead to shut down.