Solana’s high-performance blockchain architecture has fostered innovative staking mechanisms, enhancing both network security and user capital efficiency. Key components include:
Staking: Locking SOL tokens with validators to secure the network and earn rewards.
Liquid Staking Tokens (LSTs): Derivatives representing staked SOL, providing liquidity and enabling participation in DeFi.
Restaking: Reusing staked assets to secure additional services or protocols, amplifying rewards.
Liquid Restaking Tokens (LRTs): Derivatives of restaked assets, maintaining liquidity while earning multiple reward streams.
These mechanisms collectively empower users to maximize returns and contribute to Solana’s robust and scalable ecosystem.
Liquid staking addresses the liquidity limitations of traditional staking by issuing LSTs, such as mSOL or JitoSOL, when users stake their SOL through specialized protocols. Benefits include:
Immediate liquidity, enabling users to trade or utilize LSTs in DeFi applications.
Continuous earning of staking rewards without locking up assets.
Flexibility to participate in various financial activities within the Solana ecosystem.