Solana Liquid Staking Reaches All-Time High

  • 7% of Solana’s entire market capitalization is made up of liquid staking.

Statistics show that people are rapidly use the network for other purposes, such as liquid staking, defying the perception that Solana is solely about memecoins.

According to a Dune Analytics dashboard, total value locked (TVL) for liquid staking on Solana has increased dramatically since October, rising from $244 million to $3.73 billion within that period. This amounts to 7% of the total market capitalization of the network.

Memecoins are still the main source of activity on Solana, the fifth-largest blockchain by market capitalization, but the data shows that the network may draw investors and users with other use cases.

Procedure for liquid staking With $1.57 billion in TVL, or 44% of the sector’s total supply, JITO holds the largest part of the ecosystem. mSOL is second with $600 million, or 17%, while jupSOL is third with $317 million, or 9%.

Given that Ethereum is the platform where the vast bulk of liquid staking occurs, this could present a challenging scenario for Ethereum. With the assumption that capital is only shifting from one protocol to another and that Solana can absorb part of its liquid staking activity, Ethereum’s Lido, Eigenlayer, and other well-known liquid staking and re-staking protocols are going to face fierce competition.

However, according to DefiLlama, Ethereum’s liquid staking ecosystem is far bigger than Solana’s total liquid staking industry, with $47 billion of TVL, a significant tenfold advantage.

Users who already have their tokens staked in a protocol have the opportunity to utilize them in other DeFi applications through a process called liquid staking. Users receive a tokenized version of the cryptocurrency they have staked, which they can use for other purposes across ecosystems. This allows users to take advantage of a multitude of opportunities without having to unstake and cease earning yield.

Organizations Support Solana

Not all users of cryptocurrency are drawn to Solana.

In the most recent Digital Asset Fund Flows Weekly report from CoinShares, institutions invested $16 million in Solana, increasing the annual inflows to $57 million. With this, the total amount of SOL managed for major international corporations now exceeds $1 billion.

James Butterfill, head of research at CoinShares, said “we believe the hype surrounding Solana has captured the imagination of investors and is the reason why we are seeing greater inflows.”

Butterfill continued, saying that over the previous 18 months, the entities they monitor have continuously favored Solana over Ethereum, and this week’s transfers were simply one more instance of this.

Disclaimer : This article was created for informational purposes only and should not be taken as investment advice. An asset’s past performance does not predict its future returns. Before making an investment, please conduct your own research, as digital assets like cryptocurrencies are highly risky and volatile financial instruments.

Author: Puskar Pande

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