Introduction to Marinade, Solana’s leading liquid staking protocol and so much more!
As of August 2, 2022, Marinade’s liquid staking dApp has officially celebrated its one one-year anniversary operating its mainnet on Solana!
So much progress has been made within Marinade and across the greater Solana and crypto ecosystem. Marinade has not only achieved the №1 spot for TVL on Solana DeFi thru the mSOL liquid staking token, but also launched a DAO governance token, MNDE and minted the Marinade Chefs NFT Limited Edition collection. These Chef NFTs, combined with MNDE and Tribeca on-chain governance have enabled true Web3 community, facilitating a decentralized, fully utilized and performant Solana.
With incredible adoption over the last year thanks to the explosion of NFT communities, the proliferation of Solana DeFi protocols and a robust Web3 developer community, right now seems like a great time to reintroduce Marinade. What began simply as a stake pool enabling liquid staking thru mSOL is turning into so much more. It’s never too late to join the kitchen!
How mSOL liquid staking changed Solana forever
Solana is a Layer 1, proof-of-stake blockchain and its token, SOL, was designed to be staked to a global network of validators. In turn, these validators provide consensus for thousands of transactions per second (in fact, Solana aspires to settle 60,000 transactions per second!).
This foundation has enabled over 1,900 validators to launch on Solana and the Nakamoto Coefficient (a popular metric to measure a PoS network’s censorship resistance) has soared to 30, among the highest of any PoS Layer-1 blockchain.
Staking is what makes Solana’s ledger trustworthy and censorship resistant. But staking is also rewarding. Validators earn SOL emissions from their services and they distribute a part of these rewards to their stakers.
But here’s the problem: SOL is the currency of Solana. NFTs and other items are priced in it. But you can’t use SOL if it’s locked up in with a validator.
Enter Liquid staking: Pioneered by Marinade on Solana, liquid staking enables the function of staking thru a stake pool of validators, but without locking up your SOL tokens. Staking SOL to Marinade gives the user mSOL in return, a collateralized, liquid version of staked SOL. mSOL’s value accrues vs. the price of SOL from the marinade Stake Pool’s rewards.
When you swap mSOL back for SOL, expect a return of around ~6%. But you can earn more than just the stake pool rewards, because your stake is unlocked and free to use in the ecosystem. For example, you can supply it as collateral on Hubble, or lend it on Solend, provide liquidity on Orca or Raydium or others, or use it in automated covered calls strategies on Friktion.
No matter what you do with it, the token is accruing in value thru the Marinade stake account in addition to your DeFi yield.
In their lengthy report in 2022, Blockworks Research wrote that “Marinade is the Base layer of Solana DeFi.” That’s a great way of looking at the use case for mSOL in the ecosystem. Virtually everything a user does in DeFi across Solana with SOL tokens can be done with mSOL — and by doing so it’s better for the ecosystem and unlocks even more yield opportunity for the holder!
Why liquid stake SOL instead of stake?
- Total liquidity: mSOL is a collateralized version of staked SOL. Before mSOL, you had to choose between staking your tokens and using them in DeFi or to trade. Marinade perfected the Solana DeFi-Staking double-dip!
- Spread the risk: Validators can go offline or suffer extended periods of delinquency. When this happens, stakers of that validator earn no rewards. For example, in May, validator Dokia Capital shut down its validator and yet 30-plus days later, over 900,000 SOL still remain locked and earning no rewards, but because of their significant amount of stake, are still sent blocks to validate, which they do not, and harms the network. That’s an extreme case. In other cases, a validator may be down for a few days. Or they might change their commission and give less to stakers. With a stake pool like Marinade, you can take SOL stake away from validators who are not performing and direct it to those who are, thus maintaining a competitive APY.
- No waiting: When you stake with an individual validator, you must wait for the next Solana epoch in order to begin earning rewards. Then, to unstake those tokens, you must also wait for the end of the epoch (usually 48–72 hours) to get them back. mSOL, on the other hand, begins accruing value instantly for the holder and can either be unstaked on Marinade or traded 24/7 on DEX’s like Jupiter for SOL or other assets.
- Support Solana DeFi: Liquid staking tokens enable prosperity of DeFi protocols because the user no longer has to choose between staking to a validator or using their tokens in DeFi. Liquid staking contributes to DeFi opportunity for the holder and TVL for the protocols. | Browse mSOL DeFi integrations and APYs
Why use mSOL as a liquid staking token on Solana
- Tried and tested: Marinade is the first liquid staking solution on Solana and has passed multiple security audits. Over 7 million mSOL are now on the market!
- Widespread adoption: Marinade is the most widely used liquid staking token on Solana. You can even stake SOL directly from wallets like Solflare and Slope and receive mSOL instantly. And all your favorite DeFi protocols accept it and more NFT marketplace integrations are on the way.
- Total asset liquidity: mSOL is the most abundant liquid staking token with the most supply on the market. It’s also available on central exchanges like FTX and Kraken. Tokens with smaller liquid supply can suffer from extreme trading slippage in certain scenarios. Thanks in part to integration with Jupiter, even large swaps of mSOL suffer minimal slippage (”slippage” is the market price difference between the two token prices and the actual price executed on the trade).
- Benefits the ecosystem: All stake pools have different delegation strategies. Marinade stakes to the most trusted validators by far (over 450 and growing), but it also always avoids the “Superminority” of validators, so you know your stake is contributing to a more censorship resistant Solana. Other stake pools on Solana either delegate a significant amount of your stake to the superminority, harming censorship resistance, or delegate to fewer validators or primarily 0% commission validators. Marinade however will support performant independent validators of any size who have competitive commissions and delegate stake to them. | Read more about Marinade’s delegation strategy
From a stake pool to Solana’s largest DAO by TVL thru MNDE governance and Chef NFTs
Supporting the Solana community is in Marinade’s DNA and that goes for validators, NFT projects or DeFi protocols and their communities.
Marinade was founded in the spring of 2021 at the Solana x Serum Hackathon and funded by grant money from Solana Foundation and Serum. Marinade is not funded by any venture capital firm or an ICO (Initial Coin Offering).
The result? A community-driven project that has become Solana’s most valuable DAO by TVL!
Today, Marinade’s community is made up of crypto OGs, developers, validators, NFT and DeFi degens and novices alike. Everyone has a home in the Marinade kitchen. While all are welcome to join the Marinade discord, users officially join the DAO and become a Chef once they lock a minimum of 1000 MNDE tokens to mint a unique Chef NFT and become a true “Governooor.” This not only unlocks Chef-only channels in Discord but enables governance rights.
Here’s what DAO governance currently looks like at Marinade:
On-chain DAO voting: Marinade Chefs determine the future prosperity of Marinade thru proposals and on-chain votes using their Chef NFTs. To start, visit the Marinade mDAO Forum (open to anyone), and read and comment on proposals in discussion. Then, when a proposal is sent by the writer to an on-chain vote, those Chef NFT holders vote. Votes typically run for 5–6 days and must meet a quorum of 7 million MNDE.
Keep in mind that while the amount of tokens locked in a Chef determines the weight a holder has on votes, anyone in the DAO can influence votes thru comments and suggestions in the forum. Proposals so far have been modified prior to being sent to an on-chain vote as a result of feedback from the community. Every Chef has a say in the Marinade DAO!
Validator Gauges: Chef NFT holders have a say on which validators will receive 10% of the Marinade stake pool. Using the gauge weights via Marinade’s Tribeca Governance page, you can vote for the validators of your choice and those weights will determine their SOL stake.
Liquidity Mining Gauges: The main mechanism of MNDE token emissions over time is thru Liquidity Mining rewards distributed by Marinade to Solana DeFi protocols. Similar to the validator gauges, Chef NFT holders determine where to send 1 million in weekly MNDE liquidity mining emissions by using the gauges to vote to send token rewards to their favorite liquidity pools and protocols.
Come give Marinade a try!
Now one year after the mainnet launch, you can see that there is a lot on the menu waiting to be tasted at Marinade. As Solana continues to onboard new users thanks to all the great user experiences, the fast, cheap transactions and robust NFT and gaming community, Marinade is right there to help make Solana a more performant ecosystem for everyone.
Already have some SOL? Stake it for mSOL here!
Marinade.Finance is the first non-custodial liquid staking protocol built on Solana. Stake your SOL tokens with Marinade and receive mSOL (“marinated SOL”) tokens in return that can be used in decentralized finance (DeFi). mSOL is the most widely integrated collateralized version of SOL. The price of mSOL goes up relative to SOL each epoch, with rewards being accrued into your stake account.
Marinade’s delegation strategy stakes to 400+ validators that are selected automatically by an open-source, fair formula based on performance, commission, and decentralization.