Solana Staking Market Analysis: Major Players in the Liquid Staking Space

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

In Solana's TVL, liquid staking projects hold an important position and are a key factor in driving the recovery of TVL. 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.

Staking and Liquid Staking Overview

As of December 12, 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 total staked amount of 391 million SOL. The inflation rate is 6.75%, and the reward rate is 6.87%. 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 PoS public chains with higher market capitalizations.

The Solana network has a total of 1986 validators, with the top-ranking validators offering an APY close to 8%, with no commission.

In order to reward SOL holders, enhance network security, and improve censorship resistance, Solana has launched the "staking pool program." Users can deposit SOL into the staking pool and receive SPL tokens representing their share, known as liquid staking tokens (LST). Currently, 16.82 million SOL are locked in the staking pool, accounting for approximately 4.3% of the total staked amount, with an average APY of 6.68%. The top four staking pools are Marinade, Jito, BlazeStake, and Lido.

Main Participant Analysis

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 to receive mSOL, with staking rewards directly accumulated into mSOL. Marinade also offers native staking services, allowing users to earn staking rewards without the need to use smart contracts.

Currently, there are 7.058 million SOL staked in Marinade, with a TVL of $777 million and a staking yield of 6.543%. The staking volume has increased by 31.22% over the past 30 days. The circulating market cap of its governance token MNDE is $85.99 million, with a total market cap of $356 million.

Jito

Jito launched its liquid staking platform at the end of 2022. Users can stake SOL to receive JitoSOL, and the staking rewards accumulate in JitoSOL. Jito's feature lies in developing Maximum Extractable Value (MEV) infrastructure for the Solana network, with a portion of MEV rewards distributed to JitoSOL holders, making their staking rewards relatively high.

Jito currently has 6.38 million SOL staked, with a TVL of $455 million and a staking yield of 6.892%. The staking volume has increased by 17.77% in the past 30 days. Its governance token JTO has a circulating market cap of $342 million and a total market cap of $2.973 billion.

BlazeStake

BlazeStake was launched in May 2022 and has rapidly developed recently due to the overall rise of the Solana ecosystem. Users can stake SOL to receive bSOL. BlazeStake mainly uses the official staking pool smart contract from Solana Labs, which has the largest set of validators, allowing users to liquid stake to specific validators.

BlazeStake has 1.52 million SOL staked, with a TVL of 108 million USD and a staking yield of 6.232%. The staking volume has increased by 177% over the past 30 days. Its governance token BLZE has a total market value of 38.84 million USD.

Lido

Lido launched its liquid staking service on Solana in September 2021, allowing users to stake SOL to receive stSOL. However, Lido's development on Solana has not met expectations, and it announced in October that it would stop accepting new stakes.

Currently, Lido has staked 887,000 SOL on Solana, with a TVL of $63.4 million and a staking yield of 6.717%. The staking volume has decreased by 41.43% over the past 30 days. Lido's governance token LDO has a circulating market cap of $2.095 billion and a total market cap of $2.356 billion.

The Application of LST in DeFi

The LSTs of major liquid staking projects are supported in Solana's DeFi applications. The main lending protocols marginfi and Solend support mSOL, JitoSOL, and bSOL as collateral but have delisted stSOL. In the DEX Orca, mSOL/SOL and bSOL/SOL have higher liquidity, while JitoSOL/SOL and stSOL/SOL have relatively lower liquidity.

The project's incentive measures seem closely related to the growth of stake volume and DEX Liquidity. Blaze offers the highest incentives, mSOL also has certain subsidies, while Jito has not yet provided incentives for the use of JitoSOL in DeFi. Lido has chosen to exit the market as it is unable to continue providing incentives due to the fact that its tokens have been mostly distributed.

Summary

The Solana ecosystem includes various representative liquid staking solutions, each with its own characteristics and widely supported by DeFi projects. However, the total amount of liquid staking is still relatively low, accounting for only 4.3% of all staked SOL. The diversity of solutions has also led to the dispersion of liquidity, and new competitive solutions may emerge in the future.

Incentives are still crucial for the increase in staking volume and the liquidity of LST in DEX. Blaze has achieved significant growth through high subsidies, while Lido has chosen to withdraw due to its inability to continue subsidizing. In the future, competition among projects may focus more on optimizing incentives and user experience.