Analysis of the Solana Ecosystem Liquid Staking Market: Four Major Players Compete

With the cryptocurrency market warming up, Solana (SOL) has risen to become the sixth largest cryptocurrency. Among all proof-of-stake (PoS) blockchains, its staked asset size is 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 locked value (TVL) of $1.137 billion, only 11.3% of its historical peak.

In Solana's TVL, liquid staking projects are particularly important, as they are key to driving the TVL back to historical highs. In this sector, Marinade and Jito hold significant positions with their highest TVL, highlighting the importance of the liquid staking category. This article will delve into the key players in the liquid staking space on Solana and conduct a comparative analysis of their strategies and market performance.

Stake and Liquid Staking Overview

As of December 12, data shows that the market capitalization of SOL is $30.53 billion, with a staking market value of $27.62 billion, a staking ratio of 69.18%, and a staking quantity of 391 million SOL. The inflation rate is 6.75%, and the reward rate is 6.87%. Among them, the staking market value 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 in Solana, and the top-ranked validators offer an APY close to 8%, with no commission required.

To reward SOL holders and increase network 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 representing their share in the staking pool. These SPL tokens are liquid staking tokens (LST) that can circulate freely. Data shows that a total of 16.82 million SOL is locked in the staking pools, with an average APY of 6.68%. The SOL in the staking pools 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. Staking SOL on Marinade yields mSOL, and staking rewards are directly accumulated in mSOL.

Marinade also offers native stake services, allowing users to earn staking rewards without using any smart contracts (and thus no LST).

Marinade has 7.058 million SOL staked, making it the largest liquid staking project on Solana; it also has 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.

Unlike other liquid staking projects, Jito has developed Maximum Extractable Value (MEV) infrastructure for the Solana network. Due to its own MEV operations, a portion of the MEV earnings will be allocated to JisoSOL, so users staking through Jito also enjoy 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 USD; 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 recently, due to the collective explosion of the Solana ecosystem, the governance token has risen dozens of times from its low point, allowing BlazeStake to surpass Lido and become the third-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 of Solana Labs, which has the largest set of validators, allowing users to liquid stake to specific validators.

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

Blaze's governance token is BLZE, the circulating market value is not disclosed, the total market value is 38.84 million USD, and it has increased by 66.5% in the past 7 days.

Lido

Lido launched its liquid staking service on Solana in September 2021, but its development on other chains has not been ideal, failing to leverage its first-mover advantage and brand strength, and it announced in October that it would stop accepting new stakes on Solana. By staking SOL in Lido, users can receive stSOL, and the staking rewards are also accumulated into 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, down 6.7% in the past 7 days.

Applications of Various LSTs 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 both support mSOL, JitoSOL, bSOL, and stSOL as collateral for loans, but stSOL has been delisted by both projects following Lido's announcement.

On 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 growth of staking volume and liquidity in DEX may be related to the project's incentive measures. Blaze offers the highest incentives, providing an APR of 15.37% in BLZE governance token subsidies for deposits on a certain lending platform, 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 been mostly distributed, rendering them unable to provide further incentives and choosing to exit the market.

Summary

The Solana ecosystem includes a variety of representative liquid staking solutions, all 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 represents multi-chain liquidity 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 a dispersion of liquidity, and more competitive solutions may emerge in the future.

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