Solana Stake Market Depth Analysis: The Four Giants in the Liquid Staking Space

With the recovery of the cryptocurrency market, Solana (SOL) has risen to the position of the sixth largest cryptocurrency globally. Among all proof-of-stake (PoS) blockchains, Solana's staked assets are second only to Ethereum. However, compared to its market position, the capital accumulation of decentralized finance (DeFi) applications within 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 the composition of Solana's TVL, liquid staking projects occupy an important position and are seen as key factors in driving the recovery of TVL to historical highs. Among them, Marinade and Jito hold significant positions in this sector with the highest TVL, highlighting the importance of the liquid staking category. This article will delve into the main players 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, data shows that 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 staking 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; its staking ratio is also relatively high among the top PoS public chains by market capitalization.

There are a total of 1986 validators in the Solana network, and the top-ranked validators offer an APY close to 8% with no commission.

In order to incentivize SOL holders, enhance network security and 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 that represent their share in the staking pool. These SPL tokens are liquid staking tokens (LST) and can circulate freely. 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 staked amount. The top four staking pools are Marinade, Jito, BlazeStake, and Lido, which are also 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. Users can stake SOL on Marinade to receive mSOL, and the staking rewards are directly accumulated into mSOL.

Unlike other projects, 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 by staked amount; it is also the project with the highest TVL on Solana, valued at $777 million; the staking yield is 6.543%; and the staked amount has increased by 31.22% in the past 30 days.

Marinade's governance token is MNDE, with a circulating market cap of $85.99 million, a total market cap of $356 million, and a price increase of 22.2% over the past 7 days.

Jito

Jito launched its liquid staking platform at the end of 2022. Users can stake SOL in Jito to earn JitoSOL, and the staking rewards are directly accumulated into JitoSOL.

The uniqueness of Jito lies in the development of a Maximum Extractable Value (MEV) infrastructure for the Solana network, including the Jito Solana client, Jito Bundles, Jito Block Engine, and the MEV distribution system. Due to its own MEV business, a portion of the MEV profits will be allocated to JitoSOL, allowing users who stake through Jito to receive relatively higher returns.

Jito has 6.38 million SOL staked; the staking volume has increased by 17.77% in the past 30 days; the TVL is $455 million; the staking yield is 6.892%.

Jito's governance token is JTO, with a circulating market cap of $342 million, a total market cap of $2.973 billion, and a 46.6% increase over the past 7 days.

BlazeStake

BlazeStake was launched in May 2022 and has recently rapidly risen due to the overall explosion of the Solana ecosystem, surpassing Lido to become the third largest liquid staking project on Solana. Users can stake SOL in BlazeStake to receive bSOL, and staking rewards are directly accumulated into bSOL.

BlazeStake primarily uses the official staking pool smart contract from Solana Labs, has the largest set of validators, and allows 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 BlazeStake is BLZE, with a total market value of 38.84 million USD and an increase of 66.5% over the past 7 days.

Lido

Lido launched its liquid staking service on Solana in September 2021. While Lido dominates liquid staking in ETH, its development on other chains has not been ideal. Lido announced in October that it will stop accepting new stakes on Solana. Users staking SOL in Lido can receive stSOL, and the staking rewards also accumulate into stSOL.

Currently, there are 887,000 SOL staked in Lido; 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, a total market cap of $2.356 billion, and a decline of 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 gained widespread 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 the largest DEX Orca on Solana, both mSOL/SOL and bSOL/SOL have liquidity exceeding ten million dollars, and there are also direct trading pairs between mSOL and bSOL; whereas the liquidity for Jito/SOL and stSOL/SOL is relatively low.

The increase in the staking volume and the liquidity in DEX may be related to the project's incentive measures. Blaze offers the highest incentives, where users can earn a 15.37% APR subsidy of BLZE governance tokens for deposits in Solend, and a 1.98% APR subsidy of MNDE governance tokens for mSOL deposits. Jito has not yet provided incentives for the application of JitoSOL in DeFi, while Lido's tokens have been almost fully distributed, making it unable to provide further incentives, thus choosing to exit the market.

Summary

The Solana ecosystem includes various 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 a multi-chain liquid staking service provider.

However, the total amount of liquid staking is relatively small, with only 4.3% of all staked SOL being staked through staking pools. The diversification of liquidity solutions has also led to the fragmentation of liquidity, and in the future, more competitive solutions may emerge, such as marginfi's LST.

Incentives are still crucial for increasing the amount of stake and the liquidity of LST in DEX. For example, although the Blaze project has the least recognition, it offers the highest APR subsidies in DEX and lending protocols, resulting in a significant increase of 177% in staking volume over the past 30 days. In contrast, even though Lido is the most recognized in the field of liquid staking and launched early on Solana, it was unable to participate in the subsidy competition due to almost all tokens being distributed and ultimately chose to shut down its services.