- Liquid staking on Solana could grow significantly.
- Bybit introduces bbSOL for liquid staking.
- Liquid staking can drive Solana’s price.
Solana has been rapidly growing this year, both in terms of network volume and price. However, its liquid staking utilization is relatively underdeveloped compared to Ethereum.
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This has major potential for the network and SOL’s price, claims Bybit. Its report comes just weeks after major exchanges teased their Solana liquid staking programs.
Liquid Staking Is a Billion Dollar Opportunity for Solana
Solana may be gearing up for an event that could significantly boost its attractiveness to investors. On Thursday, September 12, Bybit released a report detailing the opportunity of liquid staking for Solana. The report comes weeks after Binance, Bitget, and Bybit teased their own staking products for Solana.
Liquid staking allows users to retain their liquidity while still getting their staking rewards from Proof of Stake (PoS) networks. However, as of 2024, Solana’s liquid staking is relatively underutilized. For example, 68% of Solana’s total supply is staked, or $57 billion. However, out of that, only 6.5% is in liquid staking. That’s compared to 32.2% of the total staked tokens on Ethereum.
This is a major opportunity, as liquid staking makes holding the tokens more attractive to investors. If liquid staking becomes more popular, it will positively impact the price of SOL. Notably, Bybit projects the liquid staking market to grow to $6-10 billion soon.
Bybit, Binance, and Bitget Tease Staking Products
Solana’s DeFi market has seen significant growth in 2024, especially due to the rise of memecoins. Total Value Locked (TVL) in Solana DeFi protocols has more than tripled, reaching $4.8 billion. This activity attracted major players to the market, including Bybit, Binance, and Bitget exchanges.
The exchanges announced their own liquid staking products two weeks ago with a series of cryptic tweets. In particular, Bybit shared more info about its own liquid staking token, BBSOL. With this token, traders can engage in DeFi operations, including providing liquidity, trading, or borrowing, while still earning staking rewards.
This means that traders can access more earning opportunities when holding SOL. By making SOL more attractive for passive income, demand is expected to rise, creating a positive effect on the price.
On the Flipside
- Despite its benefits, liquid staking comes with risks. Users are exposed to counterparty risks from exchanges. Moreover, liquid staking contracts rely on protocols that hackers can exploit.
- Solana’s network volume overtook Ethereum several times. However, its TVL of $4.6 is still far from Ethereum’s $44 billion.
Why This Matters
If liquid staking becomes more popular on Solana, investors will have more incentive to hold SOL. All else being equal, this will positively impact the price.
Read more about liquid staking on Solana:
Binance, Bitget, Bybit Tease Solana Liquid Staking: Here’s What We Know
Read more about the decentralized cloud:
Decentralized Cloud Is Web3’s Answer to Big Tech Monopolies
