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

Recently, the market has warmed up, and Solana (SOL) has jumped to become the sixth largest cryptocurrency, with its staking assets second only to Ethereum among proof-of-stake (PoS) blockchains. However, the total locked value (TVL) of decentralized finance (DeFi) applications in the Solana ecosystem is relatively low, at only $1.137 billion, which is about 11.3% of its historical peak.

In Solana's TVL, liquid staking projects play an important role and are key factors in driving the recovery of TVL. Among them, Marinade and Jito occupy a significant position with the highest TVL, highlighting the importance of the liquid staking category. This article will delve into the key players in the Solana liquid staking space and conduct a comparative analysis of their strategies and market performance.

Stake and Liquid Staking Overview

As of December 12, the market capitalization 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, only behind ETH; the staking ratio is also relatively high among the PoS public chains with higher market capitalizations.

Solana has a total of 1986 validators, with the top-ranked validators offering an APY close to 8%, all without any commission.

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

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 in Marinade to receive mSOL, with staking rewards directly accumulated in mSOL. Marinade also offers native staking 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; the TVL is $777 million, ranking first on Solana; the staking yield is 6.543%; the staking volume has increased by 31.22% in the past 30 days.

The governance token of Marinade is MNDE, with a circulating market cap of $85.99 million, a total market cap of $356 million, and it has increased by 22.2% over the past 7 days.

Jito

Jito launched its liquid staking platform at the end of 2022. Users can stake SOL on Jito to obtain JitoSOL, and the staking rewards accumulate directly into JitoSOL.

Jito has developed maximum extractable value (MEV) infrastructure for the Solana network, including the Jito Solana client, Jito Bundles, Jito Block Engine, and MEV distribution system. Due to its own MEV business, a portion of the MEV earnings will be allocated to JisoSOL, making the returns for users staking through Jito relatively higher.

There are 6.38 million SOL staked in Jito; 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 and a total market cap of $2.973 billion, having risen by 46.6% in the past 7 days.

BlazeStake

BlazeStake was launched in May 2022 and has rapidly developed due to the collective explosion of the Solana ecosystem, surpassing Lido to become the 3rd largest liquid staking project on Solana. Users can stake SOL on BlazeStake to receive bSOL, with staking rewards directly accumulating in 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 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, which has increased by 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. Users staking SOL on Lido can receive stSOL, and the staking rewards are also accumulated in stSOL.

Lido has staked 887,000 SOL on Solana; the staking volume has decreased by 41.43% in the past 30 days; the TVL 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, marginfi and Solend, both support mSOL, JitoSOL, and bSOL as collateral for loans, but stSOL has been delisted.

In the largest DEX Orca on Solana, both mSOL/SOL and bSOL/SOL have over ten million dollars in liquidity, and there are also trading pairs between mSOL and bSOL for direct trading; 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 deposits in Solend receiving a 15.37% APR subsidy in BLZE governance tokens, and mSOL deposits receiving a 1.98% APR subsidy in MNDE governance tokens. Jito has not yet incentivized the adoption of JitoSOL in DeFi, and Lido's tokens have already been almost fully distributed, making it unable to continue 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 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 only 4.3% of all staked SOL being staked through the staking pool. The variety of liquidity solutions has also led to a dispersion of liquidity, and some competitive solutions may emerge in the future.

Incentives seem to remain crucial for the increase in staking volume and the liquidity of LST in DEX. Although the Blaze project is the least known, it has provided the highest APR subsidies in DEX and lending protocols, with staking volume increasing by 177% in the past 30 days. In contrast, although Lido is the most well-known in the liquid staking field and launched on Solana relatively early, it has chosen to shut down due to the fact that almost all of its tokens have been distributed and it is unable to participate in the subsidy war.