This is a 2-part article. Here is the first part.
Nowadays, if you stake your tokens in a stake pool, you can only access them by withdrawing your rewards. LSTs provide liquidity from staked assets. It enables the staker to interact with DeFi protocols using LSTs tokens.
The Future of Solana LSTs
With them, you earn staking rewards and can interact with different DeFi protocols. These include lending, borrowing, and yield farming. Using LSTs on DeFi protocols improves network security.
Solana LSTs are getting started, and great things are already happening. Sanctum makes it a lot easier to use LSTs. Here is a good example of how LST tokens are integrating in Solana’s ecosystem:
Jupiter has integrated @sanctumso's new LSTs! You can now trade bonkSOL, DriftSOL and many more throughout all of Solana.
Thanks to Sanctum, these trades tap into unified LST liquidity, giving you better prices.
Jupiter is happy to drive the infinite LST future with Sanctum! https://t.co/QyuZvKVjhO pic.twitter.com/tsYqoqcMhB
— Jupiter 🪐 (@JupiterExchange) February 15, 2024
Sanctum is at the forefront of making LSTs more accessible on Solana. Its solutions, Sanctum Reserve and Sanctum Router, make swapping LSTs much easier. With this, you can swap your tokens into SOL whenever needed.
Sanctum Reserve offers a pool of liquid SOL, allowing immediate unstaking of any LST token at low fees. Sanctum also offers its Sanctum Router for LST exchange. It plans to launch Sanctum Infinity to manage assets on Solana.
On the other hand, Ethereum has the highest staked assets and LSTs. Let’s examine how it works:
LST tokens on Ethereum
Ethereum LSTs have 3 types:
- Permissioned Node Operators (E.G: stETH)
These are like elite packages in which only a few can participate. They oversee your staked assets and you receive rewards in return. To check this out, visit Lido.
- Permissionless Node Operators (E.G: rETH)
If you meet specific criteria, you can participate in this aspect of Ethereum LSTs. It’s open to all and secure. The best option to go about this is Rocketpool.
- Centralized Node Operators (e.g., cbETH)
The word centralized is famous for the banking sector. Think of this as though you are keeping your token in the bank. Coinbase, for instance, keeps your tokens safe, and you’ll get your rewards from staking tokens.
Since Jan 2024, @solana's LST market cap has skyrocketed, nearly doubling from $1.6B to a staggering $3.5B!
With unprecedented attention on this burgeoning market, let's dive into some key metrics and compare them with @ethereum's LST landscape.
Source: @DuneAnalytics,… pic.twitter.com/zrmDNKZwlB
— Chorus One (@ChorusOne) May 14, 2024
LST on Solana is aiming for success. Using Sanctum’s protocols, LSTs will expand their reach and do great things in the Solana staking pool. LSTs are your one-way ticket if you want to stake your SOL and still interact with many DeFi protocols.
Disclaimer
The information discussed by Altcoin Buzz is not financial advice. This is for educational, entertainment, and informational purposes only. Any information or strategies are thoughts and opinions relevant to the accepted levels of risk tolerance of the writer/reviewers and their risk tolerance may be different than yours. We are not responsible for any losses that you may incur as a result of any investments directly or indirectly related to the information provided. Bitcoin and other cryptocurrencies are high-risk investments so please do your due diligence. Copyright Altcoin Buzz Pte Ltd.
