Solana Liquid-Staking Tool Marinade Looks to Bolster Its Token Value With Staked SOL Capture
Pseudonymous Marinade developer Cerba said the effort will bring more legitimacy to mSOL, which is ahead of Lido’s Solana LSD token despite that big-name protocol’s dominance on Ethereum.
:format(jpg)/cloudfront-us-east-1.images.arcpublishing.com/coindesk/F5ETIWFPBFBXNM5D74KEFB3VI4.png)
Marinade.Finance is looking to bolster the value of its MNDE tokens. (Dall E)
/arc-photo-coindesk/arc2-prod/public/LXF2COBSKBCNHNRE3WTK2BZ7GE.png)
The market leader for Solana-based liquid-staking derivatives, Marinade.Finance is dangling its governance token MNDE as a carrot to kickstart a crypto economy for its iteration of staked SOL.
On Tuesday, Marinade said it will hand out 160 million MNDE tokens to protocols and validators in exchange for them depositing up to 40 million SOL tokens into Marinade’s liquid-staking product, which is Solana’s biggest decentralized-finance (DeFi) protocol with $144 million in total value locked, or TVL.
If all goes to plan, this “open door” could boost Marinade’s TVL sevenfold, Marinade developers told CoinDesk. They want to drive more users into Marinade’s mSOL token, the so-called “liquid-staking derivative,” or LSD, token that accesses the value of depositors’ locked-away SOL tokens while they generate yield from securing the Solana network.
More staked SOL means more staking interest for Marinade to take a cut of – fees that increase the protocol’s revenue. And more distributed MNDE governance tokens means more Solana DeFi protocols having a say in Marinade’s operations – increasing the protocol’s decentralization, according to its developers.
Pseudonymous Marinade developer Cerba said the effort will bring more legitimacy to mSOL, which is ahead of Lido’s Solana LSD token despite that big-name protocol’s dominance on the Ethereum blockchain.
“Basically, we think that mSOL must be pushed by more ecosystem actors to succeed as the most-used LSD on Solana,” he said.
“Marinade can push it to a point, but in the end, we both want other ecosystem actors to have MNDE and sit at the governance table, and we want them to integrate tightly with mSOL and have as many use cases as possible, to be a credible alternative to SOL.”
MNDE fell 4% in the hours following the announcement as traders digested Marinade’s plan to earmark 16% of the token’s total supply for an incentives program.
Liquid staking
Solana’s liquid-staking protocols are nowhere nearly as popular as Ethereum’s, where 33% of all staked ETH is wrapped up in LSD tokens from Lido and other staking-as-a-service providers. That’s compared with the 3% share on Solana, according to Marinade.
Network mechanics account for part of the disparity, Cerba said. As staked SOL is frozen for only three or so days at a time, and its stakers don’t have quite the same need for liquidity as ETH stakers, who can’t access their capital until the Shanghai upgrade, he said.
Disclosure
Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is an award-winning media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. In November 2023, CoinDesk was acquired by Bullish group, owner of Bullish, a regulated, institutional digital assets exchange. Bullish group is majority owned by Block.one; both groups have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary, and an editorial committee, chaired by a former editor-in-chief of The Wall Street Journal, is being formed to support journalistic integrity.
Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.