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Solana Liquid Staking Booms as Rewards Continue to Climb — Is There Still Room to Untap Further Potential?

Last Updated October 6, 2023 1:25 PM
James Morales
Last Updated October 6, 2023 1:25 PM
Key Takeaways
  • The total value locked (TVL) with liquid staking protocols on Solana has exploded in the past month.
  • Marinade, Jito, and Lido are now the top three Solana protocols when measured by TVL.
  • However, they still represent just a fraction of all the SOL staked, leaving plenty of room for growth.

Compared to those on Ethereum, Solana users have been slow on the uptake of liquid staking protocols. Yet, in the past month, a surge in interest in the technology has driven an influx of capital to platforms such as Marinade, Jito, and Lido. 

In fact, the three protocols are now the largest in the Solana ecosystem when ranked by TVL.

Solana’s Liquid Staking Protocols Boom

At the time of writing, there were $126.97M worth of SOL staked via Marinade Finance,  a 23.63% month-on-month increase.

In the same period, Jito’s TVL increased by 68.86% to $55.33M, while the value of SOL staked with Lido climbed over 14% to $55.09M.

Solana liquid staking protocols, top 3 TVL
  Top 3 Solana Protocols by TVL

Between them, the three most popular liquid staking protocols account for over 2.5% of the $9.25B worth of SOL that is currently staked.

Smaller protocols have also benefitted from the surge in demand for liquid staking on Solana. 

In the last 30 days, the TVL on JPool and BlazeStake grew 19.66% and 33.74% respectively. Both protocols now have over $10M in assets locked in their staking pools. 

Socean and Stafi have also seen significant TVL gains in the past month.

Lido on Solana Set to Wind Down Despite Soaring Interest

Despite rising usage of Solana-based liquid staking protocols, Lido is on track to wind down its Solana operations after the program failed to turn a profit since its launch.

Struggling to stay afloat in a competitive market, the team behind Lido on Solana requested $1.5 million from the Lido DAO in September to fund its continued operation.

However, with voting on the proposal due to be finalized on Wednesday, October 5, the majority of DAO members have voted  to sunset the project rather than continue funding it.

Still Room for Growth in Solana Staking

Compared to Ethereum, liquid staking still accounts for just a tiny fraction of all staked SOL.

While nearly 40% of all staked ETH is deployed in liquid staking pools, for Solana, the figure is less than 3%.

What’s more, recent trends suggest that Solana staking is likely to increase in profitability compared to Ethereum staking.

The price of SOL has increasingly outperformed ETH in recent months. As such, even though the annualized reward rate for staked SOL has decreased in the last month, the dollar value of rewards has increased  by as much as 17.55% in the same period.

Meanwhile, average annual yields on staked Solana sit at over 5% . In contrast, ETH staking yields currently average around 3.06%  per year.

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