Today, we’ve created a liquid staking token (LST) for every Solana validator. These LSTs offer stakers additional staking yield, the flexibility of instant liquidity and dozens of DeFi use cases — all with zero additional management fees.
These LSTs are automatically managed and secured by Sanctum. Validators can use these LSTs to share priority fees — something that was previously impossible — earning their stakers extra yields!
This brings the number of LSTs to over 1,000, more than 10 times what it is today. To deal with this, we’re also launching a brand new LST page on app.sanctum.so/. This does a much better job of displaying all the new LSTs, and will allow you to track the extra rewards validators are sharing with you.
For validators, we’re releasing a free and open-source tool to track and distribute your block rewards. This will be launched shortly - follow our socials to be the first to know when it's launched!. Check this post for details.
Why?
The latest Solana update implements SIMD-0096, which means that validators are now earning double the priority fees they used to. This is a significant source of validator revenue, but native stakers currently receive none of these rewards.
Many validators want to share these rewards with stakers, but distributing rewards to millions of stake accounts takes a lot of time and costs a lot. LSTs solve this problem very elegantly. Rather than using hundreds or thousands of transactions to distribute rewards to every stake account, validators can share priority fees simply by transferring SOL directly into the LSTs with just one transaction. All LST holders immediately get the increased rewards by means of LST appreciation. Validators like Jupiter, Drift, Stronghold, SolanaHub, Pico, Camao, Juicy, Laine, and many others have already been sharing their rewards in this way, which has allowed their holders to enjoy yields that are significantly higher than native staking.
LSTs are a public good and a core Solana primitive that unlock powerful new use cases for your SOL. Sanctum has built out the infrastructure needed to support thousands of LSTs. We are therefore able to create and manage LSTs at scale with no validator intervention required.
All Automated Validator LSTs are first-class citizens in the Sanctum network. They get instant access to Sanctum’s unified liquidity layer, with full Infinity integration coming shortly. They are immediately indexed and tradable on Jupiter so you can enter and exit with just a swap. Native stakers migrating to Automated Validator LSTs pay no additional fees.
While they delegate automatically to individual validators, these LSTs are NOT officially affiliated with the validators. Validators can claim and customise their LSTs by completing a simple verification process — see this post for details.
What now?
Native stakers should go to app.sanctum.so/stake-accounts to convert their native stake accounts into LSTs.
Validators should check out this post for more details on how to claim and customise their LSTs, and how to easily distribute block rewards to stakers.