As the decentralized finance (DeFi) landscape continues to evolve, leading liquid staking protocols are setting their sights beyond Ethereum. Lido, one of the most prominent names in ETH 2.0 and Terra staking, is now actively exploring expansion into other proof-of-stake (PoS) blockchains—starting with Solana, one of the fastest-growing Layer 1 networks.
This strategic move could significantly reshape how users stake SOL while unlocking new revenue streams for Lido’s decentralized autonomous organization (DAO). Backed by infrastructure provider Chorus One, the initiative aims to bring Lido’s trusted liquid staking model to Solana, introducing a yield-bearing token—potentially named stSOL—mirroring the success of stETH on Ethereum.
Why Solana? The Strategic Push for Cross-Chain Dominance
Solana has emerged as a top contender in the Layer 1 race, known for its high throughput, low transaction fees, and rapidly expanding DeFi and NFT ecosystems. With over $6 billion worth of SOL already staked across validators, the network presents a lucrative opportunity for liquid staking protocols like Lido.
Chorus One, one of the largest Solana validators and a key player in the proposal, believes Lido can capture up to 25% of all staked SOL within a year of launch. Their ambitious roadmap includes achieving 2.5% of total SOL staking supply within 12 months, with phased token unlocks tied directly to adoption milestones.
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The proposed integration would allow users to stake SOL and receive stSOL, a token that represents their share of staked assets and accrues rewards over time—just like stETH does for Ethereum holders. This not only enhances capital efficiency but also enables stSOL to be used across Solana’s DeFi ecosystem in lending markets, decentralized exchanges, and yield aggregators.
How It Works: Building stSOL on Solana
At the core of the proposal is the creation of a native liquid staking derivative for Solana. Here's how it would function:
- Users deposit SOL into Lido’s protocol.
- In return, they receive stSOL, a token pegged 1:1 to SOL but earning compounded staking rewards.
- These stSOL tokens can then be freely traded or used in DeFi protocols without locking up the underlying asset.
- Rewards are distributed automatically, with a small fee (likely around 10% of staking yield) going to the protocol.
This fee structure mirrors Lido’s existing model on Ethereum, where 10% of staking rewards are split between node operators and the Lido DAO treasury, funding development, security, and ecosystem growth.
Crucially, the development and deployment of Lido on Solana would be funded through the Lido Ecosystem Grants Program, launched in March as part of Lido’s broader governance framework. This ensures community-driven growth while maintaining decentralization.
Compensation & Incentives: Aligning Long-Term Goals
To incentivize execution, Chorus One has requested compensation in two forms:
- 2 million vested LDO tokens, released according to performance milestones.
- A revenue-sharing agreement granting Chorus One 20% of protocol fees generated from Solana operations.
These incentives are designed to align long-term success with tangible outcomes. For example:
- The first tranche of tokens unlocks after securing 2.5% of total SOL staked.
- An additional 1 million LDO tokens become eligible for release once Lido reaches 25% market share of staked SOL.
Given that Chorus One already manages $600 million in staked SOL, they bring both technical expertise and immediate validator capacity to accelerate adoption.
Benefits for Lido DAO: Diversifying Revenue Streams
Expanding to Solana isn’t just about user growth—it’s a strategic play to diversify Lido’s revenue base beyond Ethereum.
As a Lido representative explained to Cointelegraph:
“Extending liquid staking to Solana could generate protocol fees similar to what we see with stETH—10% of staking rewards distributed between node operators and the Lido DAO treasury, supporting initiatives like insurance funds and ecosystem development.”
With Ethereum still undergoing full transition post-Merge, and increasing competition in ETH liquid staking, branching out offers resilience and scalability. Moreover, success on Solana opens doors to future expansions across other PoS chains such as Avalanche, Polygon, or Cosmos.
The ultimate vision? To become the universal standard for liquid staking—simple, secure, and decentralized—across multiple blockchains.
Current Staking Metrics: Lido’s Dominance in Numbers
Lido currently holds a commanding position in the liquid staking space:
- Over 256,964 ETH staked across nearly 5,000 addresses.
- Annual Percentage Yield (APY) sits at 7.1%, expected to rise significantly once full ETH 2.0 functionality rolls out.
- Ranks as the third-largest ETH staking pool globally.
Its native token, LDO, has seen dramatic price movement recently—up 54% in 24 hours and 216% week-on-week, reaching $2.90. While market sentiment plays a role, this surge may also reflect growing optimism around governance proposals, including plans to sell a portion of LDO supply to major investment firms like Delphi Digital and Digital Currency Group.
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Frequently Asked Questions (FAQ)
Q: What is liquid staking?
A: Liquid staking allows users to stake their crypto assets (like ETH or SOL) while receiving a tokenized version (e.g., stETH or stSOL) that can be used elsewhere in DeFi. This eliminates lock-up periods and improves capital efficiency.
Q: Will stSOL be tradeable?
A: Yes. Once implemented, stSOL is expected to be fully transferable and tradable on decentralized exchanges like Orca and Raydium within Solana’s ecosystem.
Q: How does Lido make money from staking?
A: Lido charges a 10% fee on staking rewards. This fee is split between node operators who run the infrastructure and the Lido DAO treasury, which funds development and risk mitigation.
Q: Is this expansion guaranteed?
A: No. The proposal must pass governance voting by Lido DAO members. However, strong support from major stakeholders and proven demand for cross-chain liquidity increase its likelihood.
Q: Can I use stSOL in lending platforms?
A: Yes—once live, stSOL could be supplied to protocols like Solend or Tulip to earn additional yield, enabling layered income strategies similar to those seen with stETH on Ethereum.
Q: Why choose Chorus One as a partner?
A: Chorus One is one of the largest and most experienced validator operators on Solana, with a proven track record in security, uptime, and decentralized governance participation.
The Bigger Picture: A Multi-Chain Future for Staking
Lido’s potential move into Solana signals a broader shift toward multi-chain liquid staking dominance. As interoperability improves and users demand seamless cross-chain experiences, protocols that offer unified staking solutions will gain significant traction.
By leveraging its established brand, battle-tested smart contracts, and community governance model, Lido is well-positioned to lead this next phase of DeFi evolution.
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While challenges remain—including regulatory scrutiny and technical integration risks—the opportunity far outweighs them. If successful, this expansion could set a precedent for how decentralized protocols scale across ecosystems without sacrificing security or decentralization.
For users, developers, and investors alike, the arrival of Lido on Solana could mark a pivotal moment in making staking more accessible, efficient, and profitable than ever before.