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

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

In Solana's TVL, liquid staking projects play an important role and are key to driving the TVL back to historical highs. Marinade and Jito occupy significant positions 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 Overall Situation

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 staked quantity 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, second only to ETH; the staking ratio is also relatively high among the top market value PoS public chains.

There are a total of 1986 validators in Solana, with the top-ranked validators offering an APY of nearly 8%, all without commissions.

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 and receive SPL tokens representing their share, known as liquid staking tokens (LST), which can circulate freely. 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 staking volume. 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 Solana mainnet in August 2021. When staking SOL with Marinade, users receive mSOL, and the staking rewards are directly accumulated into mSOL. Marinade also offers native staking services, allowing users to earn staking rewards without using smart contracts.

Marinade has staked 7.058 million SOL, making it the largest liquid staking project on Solana by staking volume; the TVL is $777 million, ranking first on Solana; the staking yield is 6.543%; and 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 USD and a total market cap of 356 million USD, having increased by 22.2% in the past 7 days.

Jito

Jito launched a liquid staking platform at the end of 2022. By staking SOL with Jito, users can earn JitoSOL, and the staking rewards are directly accumulated into JitoSOL. Jito has developed a Maximum Extractable Value (MEV) infrastructure for the Solana network, and a portion of the MEV earnings will be allocated to JitoSOL, making the returns for users staking through Jito relatively higher.

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

The governance token of Jito is JTO, with a circulating market cap of $342 million and a total market cap of $2.973 billion, rising 46.6% in the past 7 days.

BlazeStake

BlazeStake was launched in May 2022 and recently surpassed Lido to become the third largest liquid staking project due to the collective explosion of the Solana ecosystem. By staking SOL on BlazeStake, users can obtain bSOL, and the staking rewards are directly accumulated into bSOL.

BlazeStake primarily uses the official staking pool smart contracts from Solana Labs, featuring 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% over the past 30 days; the 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, having increased by 66.5% over the past 7 days.

Lido

Lido launched its liquid staking service on Solana in September 2021, but the development was not ideal, and it announced in October that it would stop accepting new stakes on Solana. By staking SOL on Lido, users can receive stSOL, and staking rewards accumulate in stSOL.

Lido has 887,000 SOL staked; the staking amount 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 value of $2.095 billion, a total market value 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 are well supported in the DeFi applications on Solana. The two largest lending protocols on Solana, marginfi and Solend, support these LSTs as collateral for lending, but stSOL has been delisted.

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

The growth of 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 an APR of 15.37% in BLZE governance token subsidies, and mSOL deposits receiving an APR of 1.98% in MNDE governance token subsidies. Jito has not yet incentivized the adoption of JitoSOL in DeFi, and Lido's tokens have basically all been distributed, leaving them unable to provide further incentives and choosing to exit the market.

Summary

The Solana ecosystem includes a variety of 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 low, with SOL staked through staking pools accounting for only 4.3% of all staked SOL. The abundance of liquidity solutions has also led to a dispersion of liquidity, and some competitive solutions may emerge in the future.

Incentives seem to still be crucial for increasing staking volumes and the liquidity of LST in DEX. The Blaze project is the least known, but it has offered the highest APR subsidies in DEX and lending protocols, with staking volume increasing by 177% over the past 30 days. Lido, despite being the most well-known in the field of liquid staking and having launched early on Solana, has nearly distributed all of its tokens and is unable to participate in the subsidy battle, choosing instead to shut down.