The post This is How Liquid Staking Could Fuel Mass Adoption and Growth on Solana: Report appeared on BitcoinEthereumNews.com.

The Solana network is experiencing an increased influx of users and a “break-through moment,” thanks to the introduction of liquid staking on the blockchain. A new report by the leading cryptocurrency exchange, Bybit, stated that Solana’s liquid staking model, especially the exchange-launched liquid-staked SOL, would mobilize masses and accelerate the onboarding of retail users in the ecosystem. The State of Liquid Staking on Solana As a proof-of-stake network, staking is crucial to the security of the Solana ecosystem. While the process involves users delegating their SOL to one or more validators, which participate in network consensus and validate transactions for rewards, liquid staking offers much more. Liquid staking provides flexibility, liquidity, and potential for higher yields because participants can trade their liquid staking tokens (LSTs) on other decentralized finance (DeFi) protocols while maintaining exposure to their staked positions. Participants also get to stake their SOL via a staking pool that distributes their assets across a wider set of validators, enhancing decentralization and offering extra rewards. Currently, Solana’s 68% staking ratio, stemming from $57 billion worth of staked SOL, outpaces Ethereum’s 28%; however, only 6.5% ($3.6 billion) of Solana is involved in liquid staking, compared to roughly one-third of Ethereum. Bybit believes this presents an opportunity for growth on Solana’s liquid staking landscape. Using Ethereum’s LST data, Bybit predicts that Solana’s LST market has the potential to increase 5x (up to $18 billion) of its current size, especially if the latter’s LST ratio becomes as high as the former’s. Room for Growth Bybit asserted that exchange-launched liquid-staked Solana tokens could increase activity and adoption on the network, creating an environment that would facilitate the growth of liquid-staking solutions. The exchange has become the first to launch its SOL liquid staking token (bbSOL) as it looks to become a de facto bridge…

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Filed under: News - @ September 14, 2024 9:21 pm