Analysis of Solana Staking Market Depth: Key Players in the Liquid Staking Field

With the market rebounding, Solana (SOL) has risen to the sixth position in the cryptocurrency market capitalization rankings. Among all proof-of-stake (PoS) blockchains, its staked asset scale is only second to Ethereum. However, relative 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, only 11.3% of its historical peak.

In the composition of Solana's TVL, liquid staking projects play a crucial role, serving as key factors in driving the TVL back to historical highs. In this field, Marinade and Jito hold significant positions with the highest TVL, highlighting the importance of the liquid staking category. This article will delve into the important participants in the Solana liquid staking space 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 capitalization 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 capitalization of SOL ranks second among all PoS public chains, second only to ETH; the staking ratio is also relatively high among the top market cap PoS public chains.

There are a total of 1986 validators on the Solana network, with the top-ranked validators offering an APY close to 8%, and there are no commissions.

To reward SOL holders and enhance the network's security and censorship resistance, Solana has launched the "Staking Pool Program". Users can deposit SOL into the staking pool and receive SPL tokens representing their share in the pool, which are liquid staking tokens (LST) that can be freely traded. Currently, 16.82 million SOL is locked in the staking pool, with an average APY of 6.68%, accounting for approximately 4.3% of the total staked amount. The top four staking pools are Marinade, Jito, BlazeStake, and Lido, which are also the largest four 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. Staking SOL on Marinade allows users to earn mSOL, with staking rewards directly accumulating 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 largest liquid staking project on Solana in terms of staked amount; it is also the project with the highest TVL on Solana, valued at $777 million; the staking yield is 6.543%; the staked 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 and a total market cap of $356 million, up 22.2% in the past 7 days.

Jito

Jito launched its liquid staking platform at the end of 2022. By staking SOL in Jito, users can earn JitoSOL, with staking rewards directly accumulating in JitoSOL.

Jito has developed a maximum extractable value (MEV) infrastructure for the Solana network, including the Jito Solana client, Jito Bundles that allow seekers to send transaction packages to validators, the Jito Block Engine blockchain builder, and the MEV distribution system. Due to its own MEV business, a portion of MEV earnings will be allocated to JisoSOL, thus 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% over the past 30 days; TVL is $455 million; the staking yield is 6.892%.

Jito's governance token 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 recently developed rapidly 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 staking rewards are directly accumulated into bSOL.

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

BlazeStake has staked 1.52 million SOL; the staking volume 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, having risen by 66.5% in the past 7 days.

Lido

Lido launched its liquid staking service on Solana in September 2021, but the development did not meet expectations, and it announced in October that it would stop accepting new stakes on Solana. Staking SOL in Lido can earn stSOL, and the staking rewards are also accumulated into stSOL.

Lido has 887,000 SOL staked; the staking volume has decreased by 41.43% over 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, 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 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 by both projects.

In Solana's largest DEX, Orca, 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; however, the liquidity for 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 deposits in Solend receiving an APR of 15.37% in BLZE governance token subsidies, and mSOL deposits receiving an APR of 1.98% in MNDE governance token subsidies. Jito has not yet incentivized the adoption of JitoSOL in DeFi, while Lido's tokens have already been mostly distributed, making it unable to provide further incentives and opting 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 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 only 4.3% of all staked SOL being staked through staking pools. The numerous liquidity schemes have also led to the dispersion of liquidity, and in the future, some competitive schemes may emerge, such as marginfi's LST.

Incentives seem to still be crucial for the increase in 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 liquid staking field and launching on Solana relatively early, has chosen to shut down due to being unable to participate in the subsidy competition as most of its tokens have already been distributed.