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Solana liquid staking: mSOL, JitoSOL & more

Solana liquid staking Custom liquid staking tokens Trade LSTs on Mango

In this guide, we explore Solana liquid staking, show how it differs from other blockchains such as Ethereum, and explain how you can take advantage.

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By enabling users to stake SOL and simultaneously access their capital through derivative tokens, liquid staking marries security contributions to network consensus with financial flexibility, making it an increasingly popular choice among savvy investors seeking to maximize their profits.

Solana liquid staking

Liquid staking is a concept that combines the benefits of staking with liquidity.

Traditional staking requires stakers to lock up their SOL directly with a validator. This means their staked tokens are not readily available for trading, spending, or transferring.

Liquid staking, however, aims to address this liquidity issue by allowing staked assets to be used in various ways while still participating in the staking process.

When participating in liquid staking, holders stake their SOL to a smart contract or staking pool — instead of directly to a validator. In return for staking their tokens, participants receive a different type of token that represents their staked SOL. This new token — referred to as a Liquid Staking Token (LST) or Liquid Staking Derivative (LSD) — can be traded, used in DeFi applications, or transferred while still earning staking rewards. All this provides flexibility and liquidity for token holders.

The staking reward when holding an LST is typically reflected in an appreciation of the LST's price relative to the underlying asset (SOL). So, in theory, the LST will increase in value relative to SOL no matter the market conditions. However, it is possible in extreme market events for the price of an LST to depeg from the underlying asset. There could also be bugs in the smart contract or other issues that could lead to an acute loss of value.

Custom liquid staking tokens

Customized liquid staking tokens are also now available on Solana — powered by Sanctum. This enables projects to use LSTs as a delivery mechanism for extra yields and/or privileges. For example, laineSOL distributes block rewards to token holders.

A popular kickback is distributing extra revenue from priority fees to LST holders. Priority fees are additional fees you can pay to increase the likelihood your transaction will be processed more quickly by validators. Some validators are sharing their additional priority fee profits, MEV tips, and staking rewards with their LST holders — check out cgntSOL, laineSOL, picoSOL, jucySOL, and compassSOL for more details.

Another use case is the creation of validator LSTs such as laineSOL, bonkSOL, jucySOL, compassSOL, and many more. As such, validator LSTs combine all the benefits of native staking (zero fees, choose your validator) with liquid staking (instant liquidity, use in DeFi).

Sanctum has also built a router, that allows anyone to buy, sell, and trade any Solana LST instantaneously and with limited slippage — regardless of whether they are established in the market like mSOL or JitoSOL, or lesser-known ones like pathSOL or alphaSOL.

This means that you don't have to liquid-stake your native SOL manually with a LST provider, you can simply swap crypto such as SOL or USDC for the LST you'd like to hold.

Trade LSTs on Mango

If you'd like to trade Solana LSTs such as mSOL, JitoSOL, and bSOL, the easiest way to do so is on Mango.

Trading LSTs via spot trade

Make sure you have some SOL in your wallet to cover account rent and transaction fees.
Head over to app.mango.markets
Connect your Solana wallet in the top-right corner of your screen.
If it's your first time we'll guide you through creating and funding your account. It costs a small amount of SOL to create your Mango Account (this is the rent cost on the Solana blockchain) and is refunded in full if you close your account.
Next, navigate to the menu bar on the left side of your screen, and select "Trade" and then "Spot".
You'll land on the SOL/USDC market. To change markets click the SOL/USDC dropdown above the candlestick chart on the left and select the LST spot pair you'd like to trade.
Now you can use the trade form to create your LST trade. It's recommended to use limit orders as market orders can result in slippage and prices worse than you expect.
After completing the order form, submit it and sign the transaction prompts from your wallet — you’re good to go!

Trading LSTs via Mango Swap

Make sure you have some SOL in your wallet to cover account rent and transaction fees.
Head over to app.mango.markets
Connect your Solana wallet in the top-right corner of your screen.
If it's your first time we'll guide you through creating and funding your account. It costs a small amount of SOL to create your Mango Account (this is the rent cost on the Solana blockchain) and is refunded in full if you close your account.
Next, navigate to the menu bar on the left side of your screen, and select "Swap".
Use the swap form to select the LST pair you'd like to trade.
As soon as you’re happy with the order form, click "Review Swap", complete the process, and sign the transaction prompts from your wallet – happy trading!

Disclaimer: This guide is strictly for educational purposes only and doesn’t constitute financial or legal advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.