Introducing Liquid Self-Stake by Marinade
Marinade recently released a new product in order to unlock stake currently held by validators and used to run their nodes.
Unlocking asset liquidity while advancing decentralization on Solana are the two core values of Marinade since launching its liquid staking pool.
Now, following the mDAO’s passing of Proposal 21, Marinade is pleased to reveal the latest big step towards these goals.
Introducing…
Liquid Self-Stake by Marinade
Marinade now offers validators the opportunity to take their self-staked SOL and supply it to Marinade’s stake pool. Marinade will then delegate this stake amount back to their validator while also supplying them with liquid mSOL tokens equal to the amount of their self-staked SOL.
Marinade has teamed up with Solend to introduce more DeFi yield for this self stake. Once they receive the mSOL from their self stake, validators may then supply the mSOL on Solend to earn additional rewards (in SLND and MNDE) and then unlock the world of Solana DeFi for Solana’s leading validators’ self stake.
Validators can now conserve the SOL staked to their validators while making their own SOL liquid and continue earning staking rewards from that SOL. This also unlocking the added liquidity advantages of mSOL, the largest and most integrated liquid staking token on Solana.
Solana stake has never been more liquid and efficient than it is today!
With the new liquid self-stake product, validators can tap into the deep liquidity pools with mSOL while running their own validators profitably. It is a win-win for validators, Marinade, Solend, and the entire Solana DeFi space.
— Soju, Business Development at Solend
Marinade is pleased to announce that the first validator participating in Liquid Self-Stake is Staking Facilities, the second largest validator on Solana by stake and a supporter of Marinade by staking SOL for mSOL and also through the Token Exchange Program in June.
Staking Facilities has committed 1.2 million of its SOL to Marinade’s Liquid Self-Stake product. This includes transferring 700k SOL currently in Marinade to the new product and 500k additional self-staked SOL.
Liquid self-stake by Marinade is a new staking primitive tailored to the needs of validators and stakeholders who want to determine the destination of their stake while also unlocking the various benefits of liquid staking. We think it’s only a matter of time until the cost of dormant capital forces more SOL into liquid staking. Marinade’s new product covers a specific yet essential use case that prevented many stakeholders from using liquid staking protocols.
— Wolfgang from Staking Facilities
How Liquid Self-Stake by Marinade works
Rather than only earn an average of 5.5% APY on their locked stake, validators can instead supply their self stake to Marinade and receive that amount back in mSOL, a fully liquid version of their staked SOL.
Any validator with more than 10,000 self-staked SOL, a commission 10% or lower, and performance APY higher than 5% over the last 10 epochs is eligible to participate in Liquid Self-Stake by Marinade.
Marinade will take this self-staked SOL, add it to the pool, and delegate this amount back to the validator, allowing the validator to conserve some amount of stake while unlocking their previously locked funds.
The validator may keep the mSOL in two initial whitelisted options (with more planned later).
1. Supply mSOL on Solend
2. Hold mSOL in their whitelisted wallet
From here, the validators may then borrow against their mSOL on Solend and use those assets freely, whether it is to borrow more SOL or mSOL, or use the mSOL as collateral on Solend to borrow other assets, like stablecoins.
Or, they can simply supply the mSOL on Solend and earn an additional ~1% rewards including SLND and MNDE tokens on top of their mSOL gains.
To sum up, Liquid self-stake by Marinade means a validator can now earn up to three ways on their self-staked SOL.
APYs can vary greatly by strategy and risk appetite. It’s up to the validator to choose a strategy right for their portfolio. Check out The Cookbook by Marinade to browse types of Solana DeFi options with mSOL.
If the validator decides to move the mSOL out of a whitelisted option, their self-staked SOL held by Marinade will be automatically distributed across the pool by the Marinade stake bot.
Or, the validator can return their mSOL to Marinade and receive their self-staked SOL.
How Liquid self-stake enables Solana DeFi liquidity and network decentralization
Up to this point, Marinade’s stake pool has not delegated any SOL to the Solana “Superminority” of validators — the number of largest validators on Solana who make up 1/3 of SOL (currently 31 validators).
Liquid self-stake by Marinade is an advancement to the ecosystem in that it will enable these large validators with a lot of self stake to unlock new liquidity.
A mechanism is being put in place by Marinade to ensure decentralization and protocol health. As long as the TVL contributed by this product represents less than 30% of Marinade stake pool’s TVL, validators would have 100% of their self stake delegated to their validator. In the event Liquid Self-Stake product goes over 30% TVL, a portion of these validators’ stake accounts would be distributed via the Marinade stake bot and gauges throughout the pool.
The minimum amount of a stake a validator would receive back to their node would be 30%. This safeguard has been put in place to ensure this product does not negatively impact Marinade’s core mission of Solana decentralization.
It’s not just validators or Marinade who stand to benefit from liquid self-stake. Validators participating in this new product enable the following:
Validators, interested in participating? Fill out this form, or feel free to join the Marinade discord and visit the #Validators channel in Discord to discuss further.
Liquid self-stake by Marinade: Frequently Asked Questions
Who is eligible to participate in Liquid Self-Stake by Marinade?
Any Solana validator with a stake account of at least 10k SOL delegated to its validator. Validators must also have a 10% commission or lower, and a minimum of 5% average APY over the last 10 epochs.
What are the risks of Liquid Self-Stake?
Any interaction with smart contracts are subject to DeFi protocol risk. However Solend and Marinade are №1 and №2 respectively for Solana Total Value Locked according to DeFiLlama. Marinade is the longest-running Liquid Staking protocol on Solana (Launched in August, 2021) and has underdone multiple security audits (view the results) and also has a bug bounty program. This product did not change any code in Marinade’s stake pool smart contract.
Solend has also been audited by Kudelski Security and its own bug bounty program. Read more about Solend protocol risks in their docs.
How do I submit my self-stake to Marinade to receive mSOL?
Interested validators can fill out this form and the Master Chefs will be in touch to begin a setup process that transfers the self-staked SOL from the validator to the Marinade stake pool, which will then continue delegating this SOL to the validator thru the pool.
Why would a validator not just unstake their SOL and supply for mSOL for unrestricted use?
Validators will receive stake back from the Marinade stake pool and will still be able to control stake, which gives the validator larger visibility and access to MEV.
What are the fees to participate in Liquid Self-Stake by Marinade?
Validators will pay the same 6% staking management fees as all users of Marinade.
Does this introduce more smart-contract risk to Marinade?
Marinade’s main audited smart contract has not been modified in any way as a result of this new product. However, validators are subject to protocol risks by participating in Solana DeFi.
