Crypto

Major Crypto Exchanges Signal Entry into Solana Liquid Staking Market

3 months ago
Bitcoin Ethereum News

TLDR:

  • Major crypto exchanges (Binance, Bybit, Bitget) hinted at launching Solana-based liquid staking tokens
  • Solana’s liquid staking ecosystem has grown significantly, doubling in total value locked (TVL) since January
  • The new products could boost liquidity and adoption in Solana’s ecosystem
  • Exchanges may benefit from increased revenue and assets under management
  • The move indicates growing interest in Solana’s DeFi sector

Binance, Bybit, and Bitget, three of the largest cryptocurrency exchanges, have teased the launch of new Solana-based liquid staking tokens (LSTs).

These announcements, made via their official social media accounts, have sparked significant interest in the crypto community and potentially signal a major expansion of Solana’s liquid staking ecosystem.

Binance, the world’s largest crypto exchange by trading volume, first hinted at the development with posts mentioning “BNSOL” and “Coming soon.” Bybit followed suit, announcing a “new baby to the family” called bbSOL, while Bitget teased “something BG is coming #BGSOL.”

Liquid staking tokens allow users to stake their cryptocurrency and earn rewards while maintaining liquidity for other decentralized finance (DeFi) activities. This flexibility has made LSTs increasingly popular among crypto investors and DeFi enthusiasts.

The Solana blockchain has seen substantial growth in its liquid staking sector this year. The total value locked (TVL) in Solana’s liquid staking protocols has more than doubled since January 1, rising from $1.9 billion to $4.1 billion at the time of writing. However, this represents only about 7% of Solana’s total staked tokens, suggesting significant room for growth.

Currently, three main protocols – Jito, Marinade, and Sanctum – dominate Solana’s liquid staking market with a combined 77% market share. Sanctum, in particular, has hinted at its involvement in the new exchange-based LSTs, responding positively to the announcements from Binance and Bybit.

The entry of major centralized exchanges into Solana’s liquid staking ecosystem could have several implications. For the exchanges, it presents an opportunity to increase revenue through fees on staking rewards and to retain more assets under management.

By offering LSTs, exchanges can allow users to stake their Solana tokens without withdrawing them from the platform, potentially increasing their assets under management and overall valuation.

For the Solana ecosystem, the move could bring a significant influx of liquidity and new users. With their large user bases, these exchanges could accelerate the adoption of Solana-based DeFi products among retail investors.

This increased activity could further fuel growth in Solana’s DeFi sector, which has already been gaining momentum.

The announcements have already had a positive impact on some related tokens. CLOUD, the governance token of the Sanctum protocol, saw a significant price increase following the news, jumping over 40% at one point.

While the exact details of these new LSTs remain unclear, their potential launch shows the growing interest in Solana’s DeFi ecosystem. As more players enter the market, it could lead to increased competition and innovation in the liquid staking space.

The move also highlights the maturing of Solana’s liquid staking market. While still smaller than Ethereum’s liquid staking ecosystem, which commands an 83% market share of the total $42.5 billion TVL in liquid staking, Solana’s sector is showing strong growth potential.

As of the latest data, Binance holds about 33.1 million SOL tokens (worth approximately $4.7 billion) in customer deposits and third-party custody, representing about 7% of SOL’s circulating supply. Bybit’s balance exceeds 2.6 million SOL, valued at around $375 million.

Source: https://blockonomi.com/major-crypto-exchanges-signal-entry-into-solana-liquid-staking-market/