Head in the $CLOUD(s)

Key Insights

• Sanctum is building a suite of products focused on lowering the barrier to entry for launching a liquid staking token (LST) on Solana.
• By leveraging Solana's stake account design, Sanctum can offer infinite liquidity on LST-to-LST swaps by redelegating the underlying stake account. This creates an effect where any LST can borrow AMM liquidity from the total LST liquidity in AMMs.
• LSTs coming to market will no longer need to incentivize AMM liquidity, instead relying on Sanctum. However, in the absence of AMM liquidity for each individual LST, many LST transactions will require the use of Sanctum to facilitate swapping an LST with no AMM liquidity to an LST with existing AMM liquidity.
• Our forecasts show Sanctum could reach an $840 million FDV, assuming the continued growth of liquid staking on Solana and Sanctum's ability to capture the majority of that growth.

In this report, we dive into Sanctum, which launched its governance token $CLOUD on July 18, 2024. We provide an overview of the Sanctum product suite, the problems Sanctum aims to solve, how Sanctum products can change the Solana LST landscape, and a valuation model.

Introduction to LSTs on Solana