Marinade vs Jito

Jito and Marinade are currently the top two liquid staking platforms on Solana. Both projects appeal to a “DeFi native” audience via their SOL liquid staking products, but have different approaches in terms of their product offerings and infrastructure. Let’s dissect how each project operates and provides unique values to their users.

Staking Offerings

Jito

Jito’s jitoSOL token and Marinade’s mSOL token are distributed to liquid stakers for their SOL deposits. Both LSTs can be used to perform additional functions such as LP, lend/borrow, and farm with leverage in other prominent Solana DeFi platforms such as Kamino, Meteora, Raydium, and MarginFi. 

Marinade

While Jito solely focuses on liquid staking, Marinade offers native staking as well. This greatly expands Marinade’s addressable market, as ~60% of the SOL supply is natively staked while only ~5% is liquid staked. By opening themselves up to this wider market, Marinade appeals to DeFi native users on Solana as well as larger institutional players looking for the safest and most lucrative way to earn SOL rewards.

Marinade and Jito also have native tokens (MNDE and JTO, respectively) which represent voting power to govern operations on each platform. Future decisions regarding new products, incentivization tools, treasury management, and more will be voted on by each project’s respective token holders.

Both projects also have specialized infrastructure which aims to maximize stakers’ rewards. 

Infrastructure

Jito

A primary focus of Jito Labs is maximizing how much their users benefit from MEV activity on Solana. The Jito-Solana validator client reduces network congestion (created by MEV searchers) via Bundles, the Relayer, and the Block Engine:

• Bundles are a list of sequential transactions from which validators can capture MEV. 
• The Relayer filters transactions before they reach Jito validators
• The Block Engine connects relayers, MEV searchers, and validators via off-chain blockspace auction. It then determines which bundles have the highest profit opportunity, and sends them to validators, aiming to maximize overall validator profit.

MEV rewards (tips sent from searchers) are accrued in the MEV Tip Piggy Bank and airdropped to validators/stakers after each epoch. 

Jito is also building Stakenet, which aims to optimize jitoSOL rewards by staking users’  deposits with the best possible validators. There are two components to Stakenet: the Validator History Program and the Steward Program:

• The Validator History Program collects up to 3 years of data history for every validator on Solana (vote credits, commission, MEV commission, validator version, client type, etc.). Its goal is to use this data to create more informed staking decisions.
• The Steward Program computes scores based on the validator history data. A set of Stakenet keepers keeps continuously-updated records of all scores to ensure that users’ deposits are delegated to the best performing validators at all times.

Marinade

In addition to offering liquid staking, Marinade also enables native staking via the recent Marinade v2 upgrade. Two features of Marinade v2 that aim to boost safety and rewards for Marinade native stakers are the Stake Auction Marketplace (SAM) and Protected Staking Rewards (PSR). 

The SAM is Marinade’s solution to optimizing rewards for native stakers. Typically with native staking, stakers only receive Solana network block rewards, while validators can also receive additional income via MEV tips and transaction fees. SAM enables stakers to receive some of these additional rewards by creating a marketplace for validators to bid for staked SOL. These bids go directly to stakers, which acts as a proxy to transfer a portion of validators’ additional rewards to Marinade native stakers. 

PSR protects against downtime risk by requiring validators to post a SOL bond. If a validator experiences downtime, the bond is proportionally paid to stakers to replace any block rewards they missed out on. So, PSR serves as a backstop that minimizes loss potential in the case of validator downtime.

Overall, Marinade offers the only automated native staking solution on Solana, which provides an efficient way to maximize rewards while eliminating custodial and smart contract risks.

Conclusion

Jito and Marinade both play a major role in the retail liquid staking space on Solana, providing their users with competitive rewards and safety via customized infrastructure. However, Marinade sets itself apart with its native staking service. This broadens their target market into the institutional space by eliminating smart contract risk as well as using additional mechanisms such as SAM and PSM to generate additional rewards for stakers.