Marinade isn’t just liquid staking anymore

Now live on mainnet for over two years, Marinade has become established as one of the leading Solana DeFi protocols and been described as the “Base Layer of Solana DeFi” by  Blockworks Research. mSOL was the first liquid staking token to go live on Solana and as of October 2023 remains the most widely used and integrated in the ecosystem.

Marinade is honored to see mSOL held in over 75,000 wallets, integrated with dozens of DeFi protocols, and traded on central exchanges like Coinbase and Kraken. The sky is the limit for liquid staking on Solana with still just ~3% of all SOL stake made liquid so far.

But Marinade isn’t just liquid staking anymore. The true value proposition is the optimized delegation strategy that continues to be optimized over the years to deliver the best mix of decentralization of the network and APY for stakers.

And in case you haven’t heard, this strategy is now available via Native staking, too.

So Marinade is continuing to educate the ecosystem about the value proposition of the delegation strategy first and foremost, and allowing the option to go native or liquid through Marinade.

We’re sharing the real marinade value proposition in this brand-new video you can watch on YouTube or on Twitter.

How Marinade Native fits in with Solana DeFi

Marinade’s growth team along with the greater community have spent the last two years analyzing the network stake, speaking with investors of all sizes and asking why liquid staking tokens still only make up ~3% of all SOL staked.

The conclusions are: Locked SOL on a vesting schedule that is not eligible for SOL stake makes up roughly 60 million SOL. Also, the Solana Foundation’s validator bootstrapping program has another 70 million SOL that has not yet been made available to liquid staking.

Much of the remainder of native stakers are held by people who do not want to risk the smart contract or DeFi interactions. Some users (especially institutions) simply aren’t ready for DeFi or smart contract exposure yet.

But SOL staked with one validator, and especially staked to those within the superminority, is not doing enough to promote network decentralization.

That’s where Native comes in, and the sky is the limit. The real value proposition in Marinade is the delegation strategy, split between the community and the algorithm, that is always rebalancing and ensuring both optimal staking rewards and network decentralization.

The more stake is spread out from large and locked SOL holders, the more validators can be sustainable across the network and keep the network decentralized.

“Marinade Native staking benefits from automated validator designation .. this allows investors to optimize their staking yield without having to lift a finger … Unlike liquid staking, native staking is available to investors with locked SOL such as VCs and grant recipients. This opens Marinade up to a market that was completely untapped prior.” — Milk Road review of Marinade Finance, September, 2023

Only Possible on Solana

As Marinade has been promoting Native across crypto Twitter and elsewhere to share the unique value proposition, the response is that using a pool of validators via natively is actually a foreign concept for other ecosystems to understand.

Marinade is able to create a stake bot that can quickly generate 100+ stake accounts on behalf of the user just by being delegated the stake authority from the staker. While these transactions might be cost-prohibitive on other chains, on Solana, the cost is merely pennies.

So far, over 1,000 wallets have created Native stake accounts. This has resulted in over 55,000 transactions in creating and moving stake for the user automatically. And yet, the total cost to Marinade to perform these functions has been 0.68 SOL (less than $20)

Marinade Native is designed for anyone, but particularly with larger stakers and institutions in mind. There have already been some wallets that have moved their stake from the superminority to Native. This enables them to distribute their stake across the ecosystem like an index that is always rebalancing to top validators so they don’t have to monitor performance themselves. Not only is this better for the network decentralization, they also earn additional MNDE tokens for staking, and supporting the network as well.

What’s next to optimize?

Every season and market condition is a build season at Marinade. As the 2023 Breakpoint conference in Amsterdam approaches, Marinade is excited to present at the Block 0 conference as well as Breakpoint itself to discuss staking and decentralization. Just this past week, DeFiLlama recognized Marinade Native and added the stake (over 2.7M SOL currently) to Marinade’s TVL in their popular dashboard.

Here are a couple of other big updates to look out for.

Staking insurance: Marinade is finalizing work on a mechanism that can guarantee APY for stakers by working with validators in its pool. Even though the Marinade algorithm selects the best 100 validators out of roughly 2,000 on Solana any given epoch, offline events or skipped slots can affect performance in any node. It’s not always necessarily the validator’s direct fault, as hosting providers or geographic issues can cause downtime, but the impact is felt on the Marinade performance. Insurance will maintain the performance of the stake pool and ensure validators who are participating in Marinade are committed to high-performance nodes.

The concept of insurance gets even more important once slashing is implemented on Solana and stakers risk losing principal SOL for staking with validators whose actions cause a slashing incident.

Stay tuned to hear more about how this will benefit the stake pool performance regardless if you hold mSOL or Native.

Smart Contract upgrade: The core team at Marinade is nearing the completion of work and audits on its first smart contract upgrade in two years. This introduces several enhancements. Most notably for performance, Solana will soon install a “redelegate” function to its chain that enables stakers to move their stake without having to unstake and wait for a cooldown period. This update is critical for the performance of automated stake pools like Marinade which are constantly rebalancing pools. Currently, Marinade only moves a small percentage of stake each epoch in order to keep rewards flowing. But the redelegate function will let Marinade move to better-performing validators more swiftly and not miss out on any rewards.

It will be much more efficient to transfer stake to the very best validators instantly. This is also good news for validators eligible for Marinade stake, who won’t have to wait as long to receive their delegation.

To date, over 75,000 wallets have staked SOL for mSOL and now over 1,000 have staked with Marinade Native in just three months. Staking your SOL with Marinade means supporting a vast network of Solana validators, improving network decentralization, and providing Marinade more support to continue building open-source public goods that can be used by anyone on Solana.

Optimize your stake at the Marinade dApp