Jito and Fragmetric launch new Solana liquid restaking token

Liquid staking protocol Jito and restaking platform Fragmetric have launched a new liquid restaking token called fragSOL on Solana.

Fragmetric claimed in a blog post published on August 29 that the new token is the first liquid resting token native to Solana (SOL) and a resting receipt token based on Jito (JTO).

According to the platform, fragSOL is a liquid re-staking token designed to address the reward distribution and cut-off issues in liquid staking tokens. This feature, which is offered with the FragSOL token, is made possible by the platform thanks to the unique capabilities of the Solana blockchain.

What are liquid restaking tokens?

LRTs are a new type of token in the liquid staking market that allows participants in the decentralized finance space to earn rewards from the tokens they stake and Actively Verified Services.

Users, for example, deposit SOL into any liquid resttake protocol to receive liquid staked tokens. The holder can then re-use this LST by resttaking to support actively verified services to earn extra returns. However, many LRT protocols face challenges with AVS rewards.

Fragmetric says its LRT token will bring the benefits of fragSOL to the market by leveraging Jito’s re-staking framework and Solana’s token extension. Combining liquid re-staking and yield optimization allows fragSOL to increase the liquidity and composability of staking Solana tokens.

How does it work?

While Ethereum (ETH)-based liquid re-staking protocols struggle with issues related to the efficient distribution of AVS rewards, fragSOL aims to solve this through its transfer hook feature. This aspect of Solana’s token extension allows Fragmetric to manage reward distribution by ensuring the allocation of node consensus network rewards based on how long a user has held their LRT.

“When Alice transfers $fragSOL to Bob, the $fragSOL transfer hook is activated, which updates the $fragSOL balances in Fragmetric’s Rewards Module. Once the NCN rewards are received into Fragmetric’s vault, the rewards module records the time-based balance and allows users to claim their own rewards. This method allows $fragSOL to correctly calculate and distribute NCN rewards to all users.”

Piecewise metric.

Fragmetric’s fragSOL launch comes just days after Renzo launched its liquid resttake token ezSOL on Jito. The protocol also provides ezETH on EigenLayer and pzETH LRTs on Symbiotic.