The Road to 10% APY: Optimizing SOL Staking with Marinade

Marinade Finance, one of the network’s original staking providers, continues to deliver optimized staking returns for over 130,000 users. In the face of fierce opposition within Solana’s competitive staking ecosystem, Marinade’s V2 protocol is firing on all cylinders. 

Closing the door on V2’s successful Phase 1 testing period, which witnessed the creation of more than 480 PSR (Protected Staking Reward) bonds and auction winners securing over 10% APY, Marinade V2 transitions into its second phase.

Marinade Rolls Out Stake Auction Marketplace Phase 2

On August 14th, Marinade Finance shifted its revamped V2 staking protocol out of a simulated testing environment and into a live marketplace. With hundreds of validators actively placing simulating bids and auction-winning APYs reaching over 10%, Phase 1 was largely considered a great success.

Marinade’s Stake Auction Marketplace (SAM) enables validators to share extra revenue sources, like priority fees, with stakers. By bidding against each other in the SAM, validators are able to offer stakers better rewards and enhanced APY.

Marinade Stake Auction Marketplace Dashboard

While the APY of winning stakes reached over 10% during Phase 1, stakers shouldn’t expect to see bolstered rewards immediately. As stake delegations shift from their previous allocations to the SAM delegation set, Marinade is required to use auction bids to cover rebalancing costs. 

Shifting to the bid-based delegation strategy is expected to take several months. Despite the transition, Marinade has indicated that users may begin seeing enhanced staking rewards by the end of August and accelerate in Q4.

Zero-Fee Liquid Staking: More Rewards for Users

Beyond boosted staking rewards through its SAM, Marinade is also taking steps to improve its liquid staking token (LST) product. Marinade recently abolished LST fees to further optimize APY for its users.

Previously, the protocol charged a small commission, the only compulsory fee throughout the entire platform, on liquid staking rewards. Formerly put towards development costs, this fee has been removed as part of Marinade’s mission of providing stakers with maximum value.

In comparison, rivals like Jito charge a 4% fee on total staking rewards, a charge that equates to an approximate APY reduction of 0.3%. By removing this fee, Marinade contends that liquid staking will become more attractive and beneficial to stakers.

An increase in liquid staking adoption boasts numerous benefits for the Solana DeFi ecosystem. Beyond helping to further decentralize the network, the flexibility of LST assets allows for greater capital efficiency across Solana DeFi. 

According to Dune Analytics data, 6.4% of staked SOL is liquid staked, suggesting there is still plenty of opportunity for further growth and adoption of LSTs.

$MNDE Up 10.86%, Over 45% of Circulating Supply Staked

$MNDE, the protocol’s native token, responded strongly to the end of Phase 1 testing. With Marinade staking APY slated to increase to 9-10% APY in the coming months, demand for MNDE is growing.

Shortly after the launch of Phase 2, $MNDE spiked from $0.092 to a local high of $0.136, based on Step Finance data. 

Despite having retraced much of this move in the following days, $MNDE has found support at $0.102 at press time, representing a 10.86% increase on a weekly time frame.

This bullish trajectory is further reinforced by $MNDE’s impressive staking rate. Based on data collected by SolanaFloor earlier this month, $MNDE boasts one of the highest percentages of staked native tokens, suggesting that the Marinade community is largely aligned with the protocol’s long-term vision.

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