EigenLayer has transformed the staking landscape with its innovative concept of re-staking, which layers on top of existing liquid staking solutions. This advancement allows for the reuse of individual assets across various layers, making it a significant trend within the Ethereum ecosystem. Currently, liquid staking and re-staking protocols combined hold approximately $100 billion in Total Value Locked (TVL), although it’s important to note that around half of this figure is counted twice. As we investigate developments beyond Ethereum, we seek to determine if similar potential exists within this evolving trend.
Fundamental Concepts
Staking is a process where users commit their cryptocurrency assets in a Proof-of-Stake blockchain to enhance security and facilitate transaction processing. In exchange for this commitment, participants earn rewards in the form of the blockchain’s native tokens.
Liquid Staking is a service provided by select platforms that allows users to stake their assets and receive derivative tokens in return. These tokens are linked to the value of the original asset and can be utilized for various financial activities. Lido stands out as the leading provider of liquid staking, offering stETH as its liquid staking derivative.
Restaking refers to the process where assets that have already been staked can be staked again (or “restaked”) in so-called Actively Validated Services (AVS) to bolster additional blockchain applications and protocols in return for interest. Ethereum’s EigenLayer is the pioneering and largest protocol in this category.
Liquid Restaking is akin to liquid staking but focuses on the reutilization of restaked assets. Instead of manually restaking through underlying infrastructure like EigenLayer, users can restake through intermediaries such as Renzo and Ether.Fi, receiving liquid restaking tokens (LRT) instead of merely earning interest. This entire structure of derivative restaking began and expanded on Ethereum, driven by the complexity of the DeFi ecosystem and the hurdles associated with traditional staking. However, as is often the case, similar models have begun to emerge in other Proof-of-Stake networks.
Current Developments in Solana
Jito is recognized as the largest provider of liquid staking on Solana, offering jitoSOL as its liquid staking derivative token. The platform conducted a significant airdrop in December 2023, and its governance token, $JITO, has since been launched and is available for trading.
Marinade.Finance is a non-custodial staking protocol on Solana that provides both native and liquid staking options through “marinated SOL” tokens (mSOL). Its governance token, $MNDE, has also been launched and can be traded.
Sanctum is another liquid staking provider on Solana, aiming to create a cohesive liquidity layer for all Solana liquid staking tokens. Its flagship product, Infinity, is a liquidity pool that amalgamates all approved Liquid Staking Tokens (LSTs) and facilitates their trading. The Infinity token (INF) serves as the primary liquid staking token, and the platform is nearing the conclusion of its airdrop farming campaign.
Restaking Initiatives
Solayer stands out as the leading restaking protocol on Solana. Currently entering its third era of airdrop farming via invite-only access, it boasts a Total Value Locked (TVL) exceeding $60 million. Reports from CoinDesk indicate that Solayer is seeking to raise $8 million at an $80 million valuation with backing from Polychain.
Exploring Other Alternative Chains
Many other Proof-of-Stake Layer 1 networks are still in their infancy, making them less equipped for a comprehensive restaking infrastructure. The layers of restaking derivatives lose significance if the network is immature and the DeFi ecosystem is still developing. Most of these chains are currently focused on adopting liquid staking, with traditional staking still a work in progress.
When the time for restaking arrives, Ethereum compatibility may become a disadvantage for EVM-compatible chains. Any emerging native staking protocols are likely to struggle in the long term, making way for either Ethereum’s established players or chain-agnostic solutions.
On Avalanche, BENQI is a decentralized and non-custodial liquidity market protocol that provides lending, borrowing, and liquid staking services with the sAVAX token. Since its inception in 2021, it has secured a leading position, with its governance token, $IQ, available for trading.
GoGoPool is a decentralized, permissionless staking protocol created for Avalanche Subnets, offering ggAVAX as its liquid staking token and GGP as its governance token.
Liquid Staking Innovations on TON
Tonstakers is identified as the largest liquid staking protocol on the TON blockchain, providing the tsTON token as its primary liquid staking token. Supported by the Ton Foundation and OKX Ventures, it is integrated into the Tonkeeper wallet but currently lacks specific incentive programs.
Bemo is another non-custodial liquid staking protocol on TON, allowing users to stake native TON tokens in exchange for stTON tokens. It features an incentives program rewarding users with Staking Experience Points (stXP), with stXP holders sharing a pool of $BMO tokens that represent up to 20% of the total token supply.
Hipo is an open-source liquid staking protocol on TON that offers hTON as its liquid staking token and provides a 50% share of protocol fees for successful referrals.
Aptos Liquid Staking Initiatives
Amnis Finance leads the liquid staking landscape on Aptos, introducing amAPT as its liquid staking token. The platform enhances user engagement by offering various gamified incentives such as raffles and lotteries.
Thala is a multifunctional finance platform that facilitates over-collateralized stablecoin borrowing, decentralized exchange, launchpad services, and liquidity staking via stAPT as its liquid staking token. Its governance token, $THL, is also available for trading.
Tortuga Finance is focused on liquid staking within the Aptos ecosystem, utilizing tAPT as its liquid staking token, though its governance token has yet to be launched.
Liquid Staking on Sui
Volo is recognized as the premier liquid staking DeFi platform on Sui, offering voloSUI in return for staking $SUI. The platform has yet to release its governance token.
Haedal is a liquid staking protocol on Sui that allows users to stake SUI tokens and receive haSUI as its liquid staking token, with no governance token yet available.
Liquid Staking in the NEAR Ecosystem
LiNEAR is a non-custodial liquid staking protocol on NEAR, utilizing LiNEAR as its liquid staking token, while HERE serves as a non-custodial NEAR wallet that includes built-in liquid staking. The same team has also launched a mini-app on Telegram, HOT, which enables users to farm by clicking.
Restaking Developments
Karak is working toward establishing a universal restaking layer that accepts a range of tokens, including ETH and derivatives, as well as more unconventional tokens like USDC, USDT, sDAI, and Pendle tokens. The platform is currently running an airdrop farming campaign.
Altlayer is a decentralized protocol designed to facilitate the creation of both native and restaked rollups across various stacks. This concept enhances existing rollups by providing additional security, decentralization, interoperability, and rapid finality. Users can restake multiple assets, including ETH, ALT, and DODO, with its governance token, $ALT, being available for trading.
Bitcoin Staking Solutions
While Bitcoin operates on a Proof-of-Work blockchain, making native staking unfeasible, various solutions are emerging to unlock Bitcoin’s liquidity by offering an array of derivatives in exchange for locking the underlying asset.
Babylon Chain is a Cosmos-based chain that allows users to stake Bitcoin in a self-custodial manner. Its staking protocol forms a two-sided market, enabling Bitcoin holders to lock their BTC and choose which Proof-of-Stake chains to stake in for yield. This modular protocol allows PoS chains and decentralized applications to benefit from Bitcoin-backed security while facilitating scalable restaking for Bitcoin holders. Recently, Babylon secured $70 million in venture funding led by Paradigm and is currently in its testnet phase.
Pell Network is focusing on creating a decentralized marketplace and liquidity hub for Bitcoin derivatives by aggregating native BTC stake and liquid restake services, a concept they refer to as liquid restaking. Presently, it supports various networks like BitLayer, BounceBIt, Merlin, B², and Core, and is running a point program.
Stroom Network is a liquid staking protocol designed for Bitcoin’s Lightning Network, where users can deposit Bitcoin to earn routing fees from transactions. Stroom issues a wrapped Bitcoin token, lnBTC, on Ethereum, thereby providing users with additional yield opportunities. The protocol is currently undergoing testing.
Conclusion
The advancements in liquid staking and restaking are evidently progressing beyond Ethereum, with Solana making notable strides in establishing a robust staking infrastructure. Although many other Layer 1 chains are still catching up, their potential should not be underestimated as their ecosystems mature. The initial phases of omnichain restaking solutions hint at a promising future where users can access diverse staking opportunities across multiple smaller blockchains through a single protocol. Concurrently, a variety of Bitcoin staking solutions are emerging, driven by the desire to unlock liquidity.
Solana’s rapid evolution from a struggling blockchain to the second-largest DeFi ecosystem within a few months is a testament to the sector’s dynamic nature. Similar rapid developments are now unfolding within the TON ecosystem. As these blockchains continue to advance, it is crucial to monitor their progress, as market sentiments can shift swiftly, making the emergence of the restaking trend a possibility in the near future.
