The total market capitalization of liquid stake tokens (LST) on Solana has reached an all-time high of $5.5 billion. Data from Dune, a blockchain analytics platform, reveals an over 17% increase from its peak of $4.57 billion in July. This milestone shows a surge in the adoption of LSTs on Solana.
Solana LSTs are tokens representing staked SOL, issued to participants in exchange for locking up their tokens. Like other crypto, LSTs are tradeable, transferable, and useable across decentralized applications.
What is Driving Solana LSTs?
Since Marinade’s mSOL launch in August 2021, LSTs have thrived on Solana. Users’ ability to earn staking rewards on their staked SOL plus additional tokens incentivizes them to interact with LSTs in the network, increasing market capitalization.
The hassle-free staking is another catalyst for LSTs’ market capitalization. With LSTs, users are freed from staking-related concerns such as deactivating stake accounts, waiting for one epoch, and remembering to claim rewards. Instead, they can easily switch validators with a simple trade.
This stressless feature simplifies staking, making LSTs attractive to users and fueling the market cap growth. By eliminating complexities and providing flexibility, LSTs have become a compelling option for Solana users seeking efficient, flexible staking solutions.
Solana validators, responsible for verifying transactions, can issue their LSTs, creating a sense of community around a specific LST and fostering loyalty and incentives. Currently, Blaze is using its bSOL to run a reward program that incentivizes users to hold its LST. Similar initiatives from others have led to more ownership of LSTs as most users eye potential airdrops.
Top Solana LSTs
Solana offers various liquid staking solutions, providing users with flexibility and rewards. At the top of the list is jitoSOL, which represents nearly 45% of LSTs with $2.5 billion in market cap. Jito’s liquid stake tokens allow users to earn staking and MEV (Maximal Extractable Value) rewards over time, compounding yields.
Though the first to introduce LSTs, Marinade comes second in the list with an over $936 million market cap representing 17% staked tokens. It offers liquid and native staking options, with mSOL being its liquid-staked SOL.
Interestingly, centralized platforms like Binance and Bybit have entered Solana’s LST market with their offerings, bnSol and bbSol. Collectively, these tokens boast a market capitalization of over $447 million, injecting liquidity into the ecosystem.
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