Marinade Finance: A Deep Dive into Solana’s LST Leader

Marinade Finance is a liquid staking protocol with ~6M SOL staked as of June 12, 2023. They are the leader in Solana’s liquid staking segment and compete against two other liquid staking solutions, Jito and Lido. For those that would like a primer of what Marinade looked like one year ago, please reference our previous report.

Updates

Open Doors Program

Increasing the total supply of mSOL has traditionally been a struggle for Marinade, especially throughout the bear market. From the below chart, we can see that the amount of SOL staked on Marinade has held relatively steady between 5-7 million SOL for the past 2 and a half years. On a dollar basis, the amount of SOL staked has decreased from over $2B to $118M as a result of a decreasing SOL price. In comparison, in the same time since Marinade’s inception, Lido has managed to increase the amount of ETH staked from ~820K ETH to ~7.2M ETH today, representing nearly a 10x growth in native units.

As a result of the lackluster adoption, Marinade created an incentive program at the start of this year, named “Open Doors Program”, to increase the adoption of mSOL. As part of the twelve month program, up to 160M MNDE (16% of the total token supply) will be distributed to various protocols, wallets, individuals, and validators who grow mSOL adoption.

For the entire year from Feb 2023 to Jan 2024, any protocol which holds mSOL for the entire twelve month period will be eligible for 4 MNDE per 1 mSOL held. At current prices, that represents $0.20 of incentives for $17.3 worth of mSOL, or 1 cent worth of returns for every dollar of mSOL TVL a protocol retains for a year. In addition to paying protocols for having mSOL TVL, validators using Marinade’s liquid self-stake product and individuals using the referral program are also eligible for the incentives. If the program is fully successful, it could increase Marinade’s TVL in SOL by ~7x. In addition, through a governance vote in September 2022, Marinade has an ongoing grant budget of 10M MNDE to be disbursed through a grant committee.