In-depth Analysis of the Solana Staking Market: Four Giants in the Liquid Staking Field

With the market recovering, Solana (SOL) has risen to become the sixth largest cryptocurrency, with its staking assets ranking second among all proof-of-stake (PoS) blockchains, only behind 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 the TVL of Solana, liquid staking projects play a crucial role and are key to driving the TVL back to historical highs. Among them, Marinade and Jito occupy a significant position with the highest TVL, highlighting the importance of the liquid staking category. This article will explore the key players in the Solana liquid staking space in depth and conduct a comparative analysis of their strategies and market performances.

Stake and Liquid Staking Overview

According to the statistics from the data platform, 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 staking 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, only behind ETH; the staking ratio is also relatively high among the PoS public chains with higher market values.

The Solana network has a total of 1,986 validators, with the top-ranked validators providing an APY of nearly 8%, all with no fees.

To reward SOL holders and enhance 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) and can be freely circulated. Data shows that a total of 16.82 million SOL are 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 staking 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 can receive mSOL, with staking rewards directly accumulating into mSOL. Unlike other projects, Marinade also offers native staking services, allowing users to earn staking rewards without using any smart contracts.

Marinade has staked 7.058 million SOL, making it the largest staking project by volume in liquid staking 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 volume has increased by 31.22% over the past 30 days.

The governance token of Marinade is MNDE, with a circulating market value of 85.99 million USD, a total market value of 356 million USD, and an increase of 22.2% over the past 7 days.

Jito

Jito launched its liquid staking platform at the end of 2022. By staking SOL in Jito, users receive 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 is allocated to JitoSOL, making the returns for users who stake through Jito relatively higher.

Jito has 6.38 million SOL staked; the staking volume has increased by 17.77% over the past 30 days; 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 has recently rapidly developed 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 obtain bSOL, and the staking rewards are directly accumulated into bSOL.

BlazeStake mainly uses the official staking pool smart contract from Solana Labs, with 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; TVL is $108 million; the staking yield is 6.232%.

Blaze's governance token is BLZE, with a total market value of $38.84 million, up 66.5% in the past 7 days.

Lido

Lido launched its liquid staking service on Solana in September 2021, but its development did not meet expectations, and it announced in October that it would stop accepting new stakes on Solana. Staking SOL in Lido can yield stSOL, and 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 support these LSTs as collateral for borrowing, but after Lido announced its exit, stSOL has been delisted.

In the largest DEX on Solana, both mSOL/SOL and bSOL/SOL have over ten million dollars in liquidity, and there are also direct trading pairs between mSOL and bSOL; however, 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 a deposit in a certain lending platform earning an APR of 15.37% in BLZE governance token subsidies, and mSOL deposits earning 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 been almost fully distributed, making it unable to provide further incentives and choosing to exit the market.

Summary

The Solana ecosystem includes various representative liquid staking solutions, all 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 resulted in the dispersion of liquidity, and some competitive solutions may emerge in the future.

Incentives seem to be crucial for increasing the staking volume and the liquidity of LST in DEX. Although the Blaze project has the smallest recognition, it offers 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 having the largest recognition in the field of liquid staking and launching on Solana earlier, has chosen to shut down due to being unable to participate in the subsidy war as almost all of its tokens have been distributed.