Analysis of Major Players in the Liquid Staking Sector of the Solana Ecosystem

With the market recovering, Solana (SOL) has risen to become the sixth largest cryptocurrency, with its staking assets only second to Ethereum among all proof-of-stake (PoS) blockchains. However, the capital aggregation level of decentralized finance (DeFi) applications in the Solana ecosystem is relatively low, with a total value locked (TVL) of $1.137 billion, which is only 11.3% of its historical peak.

In Solana's TVL, liquid staking projects play an important role, being key to the recovery of TVL to historical highs. Among them, Marinade and Jito have become leaders in this field with the highest TVL. 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.

Solana Stake Market Overview

As of December 12, the market value 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 public chains with a higher market value.

The Solana network has a total of 1986 validators, with the top validators offering an APY close to 8%, and no commissions required. To reward SOL holders, increase network security, and enhance censorship resistance, the Solana Foundation has launched the "staking pool program." This program allows users to deposit SOL into the staking pool and receive SPL tokens representing their share in the staking pool, namely liquid staking tokens (LST).

Currently, 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 4 staking pools are Marinade, Jito, BlazeStake, and Lido, which are also the 4 largest liquid staking projects in the Solana ecosystem.

Analysis of Major Liquid Staking Projects

Marinade Finance

Marinade Finance is one of the earliest liquid staking protocols in the Solana ecosystem, launched on the mainnet in August 2021. Users can stake SOL on Marinade to receive mSOL, with staking rewards directly accumulating in mSOL. Marinade also offers native staking services, allowing users to earn staking rewards without using smart contracts.

• Staking Amount: 7.058 million SOL (maximum)
• TVL: $777 million (highest)
• stake yield: 6.543%
• 30-day stake volume growth: 31.22%
• Governance token: MNDE (circulating market cap 85.99 million USD, total market cap 356 million USD)

Jito

Jito launched its liquid staking platform at the end of 2022. Users can stake SOL on Jito to earn JitoSOL, and the staking rewards are directly accumulated into JitoSOL. Jito has developed the Maximum Extractable Value (MEV) infrastructure for the Solana network, and a portion of the MEV rewards will be distributed to JitoSOL, making the returns for users staking through Jito relatively higher.

• Staked Amount: 6.38 million SOL
• TVL: $455 million
• Stake yield: 6.892%
• 30-day stake volume growth: 17.77%
• Governance Token: JTO (Circulating Market Cap $342 million, Total Market Cap $2.973 billion)

BlazeStake

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 on BlazeStake to receive 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.

• Staked Amount: 1.52 million SOL
• TVL: 108 million USD
• staking yield: 6.232%
• 30-day stake volume growth: 177%
• Governance Token: BLZE (Total Market Cap $38.84 million)

Lido

Lido launched its liquid staking service on Solana in September 2021. Although Lido dominates the liquid staking of ETH, its development on Solana has not been ideal. Lido announced in October that it would stop accepting new stakes on Solana. Users can earn stSOL by staking SOL on Lido.

• Stake Amount: 887,000 SOL
• TVL: 63.4 million USD
• stake yield: 6.717%
• 30-day stake amount change: -41.43%
• Governance Token: LDO (Circulating Market Cap $2.095 billion, Total Market Cap $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, support these LSTs as collateral for borrowing, but stSOL has been delisted.

In Solana's largest DEX Orca, both mSOL/SOL and bSOL/SOL have over ten million dollars in Liquidity, and there is also a direct trading pair between mSOL and bSOL. 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 incentives. Blaze offers the highest incentives, with a 15.37% APR subsidy of BLZE governance tokens for deposits in Solend. Marinade's mSOL deposits receive a 1.98% APR subsidy of MNDE governance tokens. Jito has not yet provided incentives for the adoption of JitoSOL in DeFi, while Lido has chosen to exit the market due to the fact that its tokens have been almost fully distributed and is unable to continue providing incentives.

Summary

There are various representative liquid staking solutions in the Solana ecosystem, all of which are supported by DeFi projects within the ecosystem. Marinade was the first to launch and provides native staking services; Jito offers 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 still relatively low, with only 4.3% of all staked SOL being staked through staking pools. Diversified liquidity solutions have also led to the dispersion of liquidity, and more competitive solutions may emerge in the future, such as marginfi's LST.

Incentives are still crucial for increasing the amount of stake and the liquidity of LST in DEX. Although the Blaze project has the least recognition, it has achieved significant growth in a short period through high subsidies. In contrast, although Lido has an excellent reputation in the liquid staking field, it has chosen to exit the Solana market due to a lack of continuous incentives.