Solana's Liquid Staking Landscape in 2025

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Introduction

Liquid staking has emerged as a transformative force in the blockchain ecosystem, and Solana stands at the forefront of this innovation. This article explores the current state and future potential of liquid staking on Solana, going beyond mechanics to examine the underlying incentives that drive user adoption. What motivates someone to wake up and say, “Today I will liquid stake my SOL”? We’ll uncover not just how it works, but why it matters—offering clarity for beginners while delivering nuanced insights for experienced participants.

To enhance readability, this guide is structured into clear sections:

Disclaimer: This content is educational only and does not constitute financial, legal, or investment advice.

Staking on Solana

Before diving into liquid staking, it’s essential to understand traditional staking. On Solana’s proof-of-stake network, users delegate their SOL tokens to validators—nodes responsible for processing transactions and maintaining consensus. In return, delegators earn staking rewards, primarily funded by network inflation.

Solana launched its mainnet beta in February 2020 with a predefined inflation schedule:

As of 2025, inflation has stabilized near 5%, gradually decreasing toward the 1.5% target. These newly minted tokens are distributed to stakers, meaning holders who participate in staking increase their relative share of the total supply over time. Non-stakers face dilution, which explains why over two-thirds of circulating SOL is actively staked.

Unlike proof-of-work chains like Bitcoin—where miners must sell tokens to cover hardware and energy costs—Solana validators have minimal operational expenses. This results in significantly lower sell pressure compared to energy-intensive networks, although slightly higher than Ethereum due to Solana’s performance demands.

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Understanding LSTs and Duration Risk

Traditional staking locks funds for each epoch (~2.5 days), creating liquidity constraints. Liquid Staking Tokens (LSTs) solve this by tokenizing staked positions. When you deposit SOL into a liquid staking protocol, you receive an LST (e.g., mSOL, jitoSOL) representing your share of the staked pool.

These LSTs appreciate in value relative to SOL over time because the underlying staked SOL accumulates rewards. For example, if you receive 0.9 jitoSOL for 1 SOL today, that same jitoSOL might be worth 1.15 SOL in six months.

However, redeeming LSTs for SOL isn’t instantaneous. Users face duration risk—the trade-off between earning rewards and needing immediate access to capital. You can either wait for the epoch to end or swap your LST on a decentralized exchange (DEX), which may involve slippage.

Consider the December 2023 mSOL depeg event: a large sell order temporarily dropped mSOL’s price from $78 to $66. Arbitrage bots quickly capitalized on the mispricing, restoring parity within minutes. This illustrates that while LSTs are highly liquid, large withdrawals can still impact pricing—especially during volatile conditions.

The key takeaway? LSTs reduce but don’t eliminate duration risk. Market depth determines resilience: larger pools minimize slippage, making LSTs practical even for significant positions.

Leading LST Protocols and Their Incentive Models

Three major LSTs dominate Solana by Total Value Locked (TVL): Jito (jitoSOL), Marinade (mSOL), and BlazeStake (bSOL). Each offers distinct value propositions.

Jito: Capturing MEV Rewards

Jito differentiates itself by capturing Maximal Extractable Value (MEV)—profits from optimizing transaction order in blocks. While MEV exists across blockchains, Solana’s architecture makes extraction more complex. Jito modifies validator software to create a fair MEV marketplace, distributing a portion of these gains to stakers.

When you stake with Jito, your jitoSOL earns both standard staking rewards and MEV bonuses. Other protocols like Marinade and BlazeStake also benefit indirectly by delegating to Jito-enabled validators.

Marinade: Pioneering Security and Distribution

As Solana’s first liquid staking protocol, Marinade emphasizes decentralization and safety:

Marinade also supports directed staking, allowing users to allocate up to 20% of their stake to a preferred validator.

BlazeStake: Governance with Real Utility

BlazeStake’s BLZE token powers a dynamic governance model:

A unique feature is Custom Liquid Staking, enabling users to stake 100% with a single validator—ideal for those supporting specific node operators.

BlazeStake also provides practical tools: a real-SOL faucet for transaction fees, SPL token creation UI, and RPC monitoring—enhancing accessibility for new users.

Sanctum and the Future of Universal LST Liquidity

Sanctum is revolutionizing LST liquidity with its universal redemption pool. By supporting over a dozen LSTs—including bSOL, jitoSOL, and mSOL—Sanctum enables instant swaps between any LST and SOL with minimal fees (often <0.01%).

This solves a critical challenge for new LSTs: bootstrapping liquidity. Instead of relying solely on DEX pools, emerging protocols can integrate with Sanctum to offer seamless exit options from day one.

Supported LSTs include:

Sanctum effectively turns duration risk into a shared, diversified cost—making any LST feel nearly as liquid as native SOL.

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How to Perform Liquid Staking

Getting started is simple:

  1. Visit a trusted protocol like stake.solblaze.org.
  2. Connect your wallet (e.g., Phantom).
  3. Select the amount of SOL to stake.
  4. Confirm the transaction.

You’ll receive bSOL (or equivalent) at a rate slightly below 1:1—this reflects accrued rewards. For example, 1 bSOL may represent 1.11 SOL after several months of compounding.

No technical expertise is required. With as little as $10, you can begin experimenting safely.

LSTs in Decentralized Finance

Holding an LST unlocks powerful DeFi opportunities:

Lending

Deposit LSTs on platforms like MarginFi or Solend to earn passive yield. Since LSTs are already appreciating assets, lending APYs are modest—but combined with base rewards, they offer low-risk compounding.

Leveraged Staking (Looping)

Use your LST as collateral to borrow SOL, then re-stake it:

⚠️ Risk Note: This amplifies both gains and losses. A sharp drop in LST value could trigger liquidation.

Providing Liquidity

Deposit LST-SOL pairs into DEX pools (e.g., Orca) to earn trading fees. Risks include impermanent loss, though it’s minimal when pairing correlated assets like jitoSOL/SOL.

Advanced users may explore LST-governance token pools (e.g., jitoSOL-JTO), which often carry higher yields due to protocol incentives.

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Frequently Asked Questions

Q: Are LSTs safer than direct staking?
A: Not necessarily safer—but they offer better liquidity and often higher yields through MEV or incentives.

Q: Can I lose money with LSTs?
A: Yes. Smart contract risks exist, and sharp market moves can cause temporary depegs during large redemptions.

Q: Which LST should I choose?
A: For MEV exposure: Jito. For stability: Marinade. For governance control: BlazeStake.

Q: Do I need to unstake manually?
A: No. Most users sell their LSTs on DEXs for instant liquidity via platforms like Sanctum.

Q: Is liquid staking centralized?
A: Top protocols distribute stakes across many validators, promoting decentralization.

Q: Can I use LSTs on other blockchains?
A: Not natively—but bridges allow cross-chain use with added risk.

Conclusion

Solana’s liquid staking ecosystem combines innovation, accessibility, and robust incentives. Whether you’re drawn to Jito’s MEV advantages, Marinade’s reliability, or BlazeStake’s governance depth, there’s a path tailored to your goals.

With tools like Sanctum enhancing liquidity and user-friendly interfaces lowering entry barriers, now is an ideal time to explore liquid staking—even with small amounts. The synergy between LSTs and DeFi opens doors to yield optimization, lending, and automated strategies previously unavailable in traditional staking.

As the ecosystem evolves, expect further integration, improved risk management, and novel utility layers built atop these foundational assets.

Final Note: Always conduct your own research. Start small, understand the risks, and scale as confidence grows.

Core Keywords: Solana liquid staking, LST tokens, jitoSOL, mSOL, bSOL, MEV rewards, Sanctum liquidity