Solana Validator Spotlight: Lucky Stake
The growing crypto space has no shortage of new and exotic platforms to try, and new ideas seem to emerge every week.
By comparison, staking Layer-1 tokens like SOL for rewards can be a more predictable and boring way to participate in DeFi. A modest amount of staking rewards are sent to the user regularly after each epoch and with little variance as long as the validator’s performance is predictable.
One Solana validator has taken it upon themselves to add a little fun and luck to users who stake their SOL. And it’s an option that just got even more appealing thanks to mSOL and Marinade’s new Directed Stake product.
Lucky Stake is a case of Solana builders whose idea came to life through a hackathon, and it’s an idea that grows better for all involved the more the community participates.
Meet Lucky Stake
Timoon (@Timoon21 on Twitter) is the co-founder with Delf Menolly of the validator LuckyStake. Timoon grew interested in Solana during “Solana summer 2021, and like many, he enjoyed the low transaction fees and fast user experiences across Solana DeFi.
“I tried some other blockchains,” said Timoon. “But I hated having my transaction waiting in a mempool.”
Timoon initially grew interested in blockchain technology as a user (and in fact, was one of the early stakers in Marinade, Solana’s first liquid staking protocol, in August 2021). But as he participated in the growing ecosystem, he soon noticed something else: the vibrant and collaborative builders’ community on Solana.
“What immediately impressed me is the ability of the different teams on Solana to build together. There’s a real appetite for composability between the different protocols.”
Following the collapse of FTX-Alameda in November, Timoon’s desire to build something himself on Solana grew. He saw a chance for the community to regain control of the network and fuel further decentralization. At the time, community initiatives like Lamport DAO’s Sandstorm hackathon, as well as the Solana Foundation’s Grizzlython hackathon had launched, and so Timoon and Delf went to work on a new spin on Solana validators.
Lucky Stake: Staking rewards plus raffle-style rewards
As a proof-of-stake blockchain, Solana relies on a network of validators to reach consensus on thousands of transactions per second in a decentralized way. For this service, validators are awarded SOL token rewards from Solana blockchain emissions each epoch (every 2–3 days).
Typically, a validator charges a commission from 0–100%. 100% commission means the validator receives all the rewards for themselves (these validators typically only stake their own SOL), while most validators charge between 4–10% to attract SOL stake from Solana users, who sent most of the emissions the staker receives.
At Grizzlython, Lucky Stake introduced a different model designed to bring more fun to stakers with a unique rewards scheme: What if the validator not only distributed staking rewards to stakers, but shared commission with one lucky staker each epoch?
So Lucky Stake built a validator using Latitude as the server, and Jito for the client.
For commission, Lucky Stake charged a 4% commission, but here’s the kicker: This commission gets split 50/50 after each epoch with one lucky staker via a raffle amongst all the stakers. The more stake you have with Lucky Stake, the larger chance you have to win the raffle (1 SOL = 1 ticket up to 1,000 SOL, then .5 tickets per SOL after). Stake tickets with Lucky Stake are also cumulative over the last 12 epochs. This benefits those who keep and hold their stake with Lucky Stake with more chances to win.
The biggest challenge to running a validator once it’s set up is to maintain uptime, which benefits from a good alert system to identify any problems that may cause an outage. For validators, perhaps the hardest hurdle to get going (assuming you have Linux experience) is to maintain the daily vote cost of about 1 SOL. Currently, Lucky Stake has a strong Marinade performance score, meaning the rewards pool benefits from additional stake delegation from Marinade’s pool. You can view the performance of the Lucky Stake validator on Marinade’s Validator Dashboard.
Lucky Stake meets Marinade’s Directed Stake
But the permissionless Marinade algorithm is just one of three ways that Lucky Stake can get stake just from Marinade, plus whatever marketing efforts they are doing on their end to attract additional stake.
The launch of Directed Stake has introduced the ability for stakers to receive mSOL, a liquid staking token for SOL stake, and also automatically participate in the Lucky Stake raffles each epoch.
Solana Snapshots, a grant project funded by Marinade around the time of Sandstorm hackathon, introduced the possibility to link those wallets that used Marinade Directed Stake with both the validators they directed to, even if the wallet ended up using the mSOL on a top Solana DeFi protocol (the current list is Solend, Raydium, Orca, Port, Tulip and Saber. It’s the latest example of the composability of the Solana ecosystem that attracted Timoon to Solana. Now, validators can provide exclusive rewards to their stakers while the stakers can stay liquid.
mSOL is a liquid staking token that can be built on top of easily by third-party developers using its SDK. With a simple API request, Lucky Stake can see who has directed their mSOL to Lucky Stake, while Marinade handles the snapshots. Users can also stake to Marinade from LuckyStake’s website.
“With just a few lines of code,” said Timoon. “This allows the user to have a complete staking experience without having to leave LuckyStake.xyz.”
Since its beginning as Solana’s first stake pool, Marinade has always been committed to building tools to help Solana validators achieve sustainability. The validators who have built on Directed Stake like Lucky Stake have already enjoyed a huge rise in total stake (see also Solana Compass or Avaulto). To date,100k SOL of Lucky Stake’s 125k total comes via Marinade’s algorithm, directed stake and MNDE validator gauges.
“It’s a real leverage effect for the long-term, sustainable growth for the validator. This also benefits our stakers, as it increases the amount of SOL available for the Lucky rewards.”
Ready to direct your SOL to the validator of your choice? Do it right in the Marinade DApp.
