TL;DR
- Solana is adopting a liquid staking model that improves on traditional staking, offering greater flexibility and liquidity.
- Despite a staking ratio of 68%, only 6.5% of SOL is liquidly staked, suggesting significant growth potential.
- Bybit launches its own liquid staking product, bbSOL, to facilitate retail investors’ access to the DeFi ecosystem.
Solana is going through a crucial phase in its evolution as a proof-of-stake (PoS) blockchain with the adoption of a liquid staking model that promises to revolutionize the way users participate in the network.
This innovative approach not only improves the traditional staking model, but also allows users to earn rewards while maintaining access to their assets.
Instead of locking up SOL tokens for a set period, liquid staking on Solana allows assets to be pooled across multiple validators, encouraging greater decentralization and providing participants with liquid staking tokens (LSTs).
These tokens act as on-chain receipts for staked assets, which can be used in various DeFi protocols, opening up new opportunities for trading and generating additional yields.
Despite Solana boasting an impressive 68% staking ratio, liquid staking adoption is still relatively low, with only 6.5% of SOL liquidly staked.
This low level of adoption represents a significant opportunity for growth, especially when compared to Ethereum, where nearly a third of staked assets are held through liquid staking.
The expansion of the DeFi landscape on Solana portends considerable growth for the liquid staking market, with projections suggesting it could reach a size of between $6 and $10 billion in the near future.
In this context, Bybit has launched Bybit Staked SOL (bbSOL) , its own liquid staking product for Solana.
As the first exchange to introduce proprietary LST for Solana, Bybit seeks to connect retail investors with the DeFi ecosystem in a more accessible way.
With bbSOL, users can exchange SOL for bbSOL and earn staking rewards of up to 7% APY, making it easier to participate in the liquid staking market.
The Potential for Growth in Solana
The rise of memecoins on Solana has not only attracted retail investors but has also sparked increased interest in the blockchain’s DeFi capabilities.
With over $57 billion in SOL staked, Solana surpasses Ethereum in native staking participation.
However, the liquid staking segment remains largely unexplored.
Bybit’s liquid staking solutions could play a pivotal role in bridging this gap, offering user-friendly platforms for users looking to enter the emerging liquid staking market.
If Solana’s liquid staking ratio matches that of Ethereum, the market could reach up to $18 billion.
This growth is supported by a favorable environment for DeFi applications, characterized by an increase in transaction volumes and user engagement.
With products like Bybit’s bbSOL, more users are expected to be able to access the benefits of liquid staking and actively participate in Solana’s DeFi ecosystem.
