Analysis of Solana Staking Market Depth: Four Major Market Makers in the Liquid Staking Field

As the cryptocurrency market warms up, Solana (SOL) has jumped to the sixth largest cryptocurrency position. Among all proof-of-stake (PoS) blockchains, Solana's staking asset scale is second only to Ethereum, ranking second. 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 the composition of Solana's TVL, liquid staking projects play a crucial role, serving as key factors in driving the TVL back to historic highs. In this sector, Marinade and Jito hold significant positions with the highest TVL, highlighting the importance of the liquid staking category. This article will delve into the important players in the liquid staking space on Solana and conduct a comparative analysis of their strategies and market performances.

Stake and Liquid Staking Overall Situation

As of December 12, the data shows that the market capitalization of SOL is $30.53 billion, the staked market capitalization is $27.62 billion, the staking ratio is 69.18%, the staked amount is 391 million SOL, the inflation rate is 6.75%, and the reward rate is 6.87%. SOL's staked market capitalization ranks second among all PoS public chains, second only to ETH; the 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, with the top-ranked validators offering an APY of nearly 8%, all without any commission.

To reward SOL holders, enhance network security, and improve censorship resistance, Solana has launched the "staking pool program," allowing users to deposit SOL into staking pools and receive SPL tokens that represent their share in the staking pool. These SPL tokens are liquid staking tokens (LST) and can circulate freely. 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 approximately 4.3% of the total staked amount. The top four staking pools are Marinade, Jito, BlazeStake, and Lido, which are the largest four 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 allows users to receive mSOL, with staking rewards directly accumulating in mSOL.

Unlike other projects, Marinade also offers native staking services, allowing users to earn staking rewards without using any smart contracts.

Marinade has 7.058 million SOL staked, making it the largest liquid staking project on Solana by staking volume; 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 cap of $85.99 million and a total market cap of $356 million, having increased by 22.2% over the past 7 days.

Jito

Jito launched its liquid staking platform at the end of 2022. In Jito, staking SOL yields JitoSOL, and the staking rewards are directly accumulated into JitoSOL.

Jito has developed the Maximum Extractable Value (MEV) infrastructure for the Solana network, which includes the Jito Solana client, Jito Bundles that allow searchers to send transaction packages to validators, the Jito Block Engine blockchain builder, and the MEV distribution system. Due to its own MEV operations, a portion of the MEV profits is allocated to JisoSOL, so users staking through Jito also enjoy relatively higher returns.

There are 6.38 million SOL staked in Jito; the staking volume has increased by 17.77% over 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 value of $342 million, a total market value of $2.973 billion, and an increase of 46.6% over 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 3rd largest liquid staking project on Solana. By staking SOL in BlazeStake, you can receive bSOL, and the staking rewards are directly accumulated into bSOL.

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

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

Lido

Lido launched its liquid staking service on Solana in September 2021. However, its development on Solana has not been ideal, as it failed to leverage its first-mover advantage and brand advantage, 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 in stSOL.

Lido has staked 887,000 SOL; 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 decrease 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 received good support in Solana's DeFi applications.

The two largest lending protocols on Solana, marginfi and Solend, both support mSOL, JitoSOL, bSOL, and stSOL as collateral for lending, but stSOL has been delisted by both projects after Lido announced its launch.

On Solana's largest DEX Orca, both mSOL/SOL and bSOL/SOL have liquidity exceeding ten million dollars, and there are trading pairs between mSOL and bSOL that can be traded directly; while the liquidity for Jito/SOL and stSOL/SOL is relatively low.

The increase in staking volume and liquidity in DEX may be related to the project's incentive measures. Blaze offers the highest incentives, with a deposit in Solend 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 provided incentives for the adoption of JitoSOL in DeFi, and Lido's tokens have already been mostly distributed, leaving them unable to provide further incentives and choosing to exit the market.

Summary

The Solana ecosystem includes various representative liquid staking solutions, all of which are supported by DeFi projects within the ecosystem. Marinade was the first to launch, offering native staking services; Jito provides higher returns 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 SOL staked through staking pools accounting for only 4.3% of all staked SOL. The abundance of liquidity solutions has also led to the dispersion of liquidity, and some competitive solutions may emerge in the future.

Incentives seem to be crucial for increasing staking volume and the liquidity of LST in DEXs. The Blaze project has the least recognition but has offered the highest APR subsidies in DEXs and lending protocols, with staking volume increasing by 177% over the past 30 days. Lido, despite having the most recognition in the liquid staking space and launching on Solana relatively early, has nearly exhausted its token distribution and chose to shut down rather than participate in the subsidy war.