Here’s how liquid staking could fuel Solana’s mass adoption and growth: report

The Solana network is experiencing an increased influx of users and a “breakout moment”, thanks to the introduction of liquid staking on the blockchain.

A new report from the leading cryptocurrency exchange, Bybit, stated that Solana’s liquid staking model, especially the liquid staking SOL launched on the exchange, would mobilize masses and accelerate the onboarding of retail users into the ecosystem .

The state of liquid betting in Solana

As a proof-of-stake network, staking is crucial to the security of the Solana ecosystem. While the process involves users delegating their SOL to one or more validators, who participate in network consensus and validate transactions for rewards, liquid stake offers much more.

Liquid Stake provides flexibility, liquidity and the potential for higher returns because participants can trade their Liquid Stake Tokens (LST) with other decentralized finance (DeFi) protocols while maintaining exposure to their staked positions. Participants can also stake their SOL through a stake pool that distributes their assets among a wider set of validators, improving decentralization and offering additional rewards.

Currently, Solana’s 68% stake ratio, which comes from $57 billion of staked SOL, exceeds Ethereum’s 28%; however, only 6.5% ($3.6 billion) of Solana is involved in liquid holdings, compared to roughly a third of Ethereum. Bybit believes this presents a growth opportunity in Solana’s liquid betting landscape.

Using Ethereum’s LST data, Bybit predicts that Solana’s LST market has the potential to grow 5x (up to $18 billion) from its current size, especially if the latter’s LST ratio becomes as high as the first one.

Room for growth

Bybit claimed that liquid-staking Solana tokens released on the exchange could increase activity and adoption on the network, creating an environment that would facilitate the growth of liquid-staking solutions. The exchange has become the first to launch its liquid stake token SOL (bbSOL) as it looks to become a de facto bridge between retail investors and the wider ecosystem.

Meanwhile, liquid stake in Solana is already showing signs of growth, with at least half of the network’s ten largest DeFi protocols locked by total value now offering these services.

“With the gradual expansion of Solana’s DeFi ecosystem, we expect this growth trend to form a positive feedback loop, as it will likely increase the demand for LST. This increased demand, in turn, may attract more developers , protocols and users in the Solana ecosystem, further fueling Solana’s DeFi boom, as we’ve seen since the early days on Ethereum,” Bybit said.

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