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- Weekly deposits far outweighed withdrawals on Jito.
- Solana’s low market capitalization in terms of cash provided enormous growth opportunities.
Solanas [SOL] The largely untapped liquid staking market started to look promising, driven by the efforts of emerging liquid staking protocol Jito.
How much are 1,10,100 SOLs worth today?
Jito liquefies SOL
According to a pseudonymous on-chain researcher Emperor Osmo, Deposit staking on Jito went parabolic, with a sharp increase observed in the third quarter of 2023. According to data at the time of publication, more than two million SOLs had been staked on the platform, additional data from a Dune dashboard revealed.
Source: Dune
Moreover, a steady increase in the weekly number of strikers has also been observed over the past three months. The fact that weekly deposits far outweighed withdrawals demonstrated users’ confidence in the wagering process.
Source: Dune
Will Solana tap into its untapped potential?
As is known, liquid staking allows users to participate in staking directly, while also retaining the option to use them elsewhere in decentralized finance (DeFi) for opportunities for higher returns.
Lido Finance [LDO] for example, arose to fill shortcomings in conventional Ethereum [ETH] strike mechanism.
While Solana boasted one of the largest market caps, pretty much 5% of the offering was available via liquid staking tokens (LST). Compare this to Ethereum, which had a liquid stake share 37% at the moment of writing.
And therein lies the great opportunity to free up Solana’s remaining stake for liquid staking. If such a vision were to become a reality, it would significantly increase Solana’s DeFi potential.
The Jito Stake Pool allows users to stake their Solana tokens in exchange for an LST called JitoSOL. As with other protocols, the token gains value by staking rewards over time.
A look at Solana’s betting numbers
According to The Staking Explorer, Solana’s market cap was $7.77 billion, with an average annualized reward rate of 6.97% at the time of publication.
Realistic or not, here is SOL’s market cap in BTC terms
While staking momentum has clearly increased in recent months, staking returns have declined. The culprit is the proof-of-stake (PoS) concept, which means that the more stakers there are, the more thinly the proceeds are spread.
Source: The Staking Explorer
At the time of publication, SOL was exchanging hands at $19.58, down 2.6% in the past 24 hours. SOL has struggled with bearish market sentiment, causing the coin to lose 19.58% of its value over the past month, data from CoinMarketCap showed.
