Liquid staking puts your assets aside, halting their use for other profitable activities. It changed the game by keeping staked tokens active in DeFi operations.
In this article, you will learn more about liquid staking and how it works on Solana with Jito Finance, Marinade Finance, Marginfi, Blaze, and Sanctum.
What is Liquid Staking?
Liquid staking lets you get involved with DeFi activities with your staked tokens. It allows your staked funds to be applicable while in the staked state. You earn passive income from staking and perform DeFi activities with the staked tokens.
When you deposit funds to a liquid staking provider, you get a staking token (LST) representing your stake. Liquid staking tokens (LSTs) are helpful in DeFi operations like lending and trading. Here are some stats about its TVL in these protocols:
Source: Coingecko
Source: The Value of Liquid Staking on Solana
Liquid staking platforms now hold crypto assets worth over $54 billion. Unlike traditional staking, which ties up your assets, liquid staking gives you liquidity and chances to earn more. This practice began on Ethereum and now includes other chains such as Solana, Near, and Binance Smart Chain (BSC).
Solana ranks among the top crypto assets by market size. The network’s security relies on over 360 million staked $SOL tokens, which comprise over 60% of the tokens in circulation. However, staking causes a decrease in the amount of liquidity available in the marketplace. Liquid staking solves this issue by allowing investors to use their staked assets while supporting the network. Liquid staking platforms hold over 23 million $SOL worth roughly $3.6 billion. Yet, this amount represents only a tiny part of all staked SOL.
Notable Liquid Staking Platforms on Solana
1) Jito Finance: Jito Finance influences more than 91,000 Solana investors who stake with a yield exceeding 8%. The platform runs JitoSol (Jito Staked Solana), a liquid staking product. Users get JitoSol tokens equal to their staked SOL, which they can apply in DeFi activities.
- Benefits: Jito applies Maximal Extractable Value (MEV) tactics to boost rewards. You can trade JitoSol tokens on decentralized exchanges for liquidity. Jito DAO handles governance, consisting of JTO token holders.
- Fees:
- Annual management fee of 4% on rewards, including MEV revenue.
- You pay a 0.1% withdrawal fee if you unstake through the website.
- How to Stake on Jito:
- Visit the Jito liquid staking platform.
- Click “Stake Now” and connect your wallet.
- Enter the amount of SOL you wish to stake.
- Confirm the transaction to receive JitoSol.
Source: X
2) Marinade Finance
Marinade Finance is the first liquid staking platform on Solana. It offers native and liquid staking services and optimizes staking by routing assets to the best-performing validators. More than 150,000 users stake over $1.2 billion of SOL on Marinade.
- Benefits: You get mSOL tokens as rewards, which is helpful in DeFi operations. Marinade DAO handles governance, and MNDE token holders enter the governance process. Marinade also possesses a directed stake feature that enables the user to stake the SOL token to preferred validators.
- Fees:
- There are no charges for unstaking at the end of Solana epochs.
- Instant unstaking fees range from 0.1% to 9%, depending on liquidity.
- They take a 6% commission on rewards.
- How to Stake on Marinade Finance:
- Visit the Marinade Finance website.
- Hit “Optimize your staking” and link your wallet.
- Pick a staking plan and input the SOL amount to stake.
- Approve the transaction to get mSOL.
Source: X
Conclusions
Liquid staking on Solana offers a new way to keep your funds accessible while earning extra yields. Jito Finance and Marinade Finance make it easy to stake SOL and perform DeFi activities.
As with any investment, ensure you get the platform’s terms and fees before starting. Liquid staking makes the network safer and gives you chances for better returns. The second part of this article is about other Solana liquid staking platforms.
Disclaimer
The information discussed by Altcoin Buzz is not financial advice. This is for educational, entertainment, and informational purposes only. Any information or strategies are thoughts and opinions relevant to the accepted levels of risk tolerance of the writer/reviewers and their risk tolerance may be different than yours. We are not responsible for any losses that you may incur as a result of any investments directly or indirectly related to the information provided. Bitcoin and other cryptocurrencies are high-risk investments so please do your due diligence. Copyright Altcoin Buzz Pte Ltd.
