Lido Staked SOL (STSOL)

Staking and Rewards

Lido Staked SOL lets you stake your SOL tokens to earn daily staking rewards. When you stake, you receive stSOL tokens that represent your staked SOL plus rewards. These tokens increase in value daily to reflect earned rewards.

Liquidity and Flexibility

Unlike traditional staking, your staked SOL is not locked. You can unstake anytime without waiting periods. The stSOL tokens are liquid, meaning you can trade them or use them as collateral in other DeFi protocols on the Solana network.

DeFi Integration

stSOL tokens can be used across the Solana DeFi ecosystem for activities like farming, lending, or borrowing. This allows you to earn additional rewards or use your staked assets in various decentralized finance applications while still earning staking rewards.

Network Security

By staking SOL through Lido, you help secure and strengthen the Solana blockchain network without needing to run your own validator node. Lido manages the technical side, making staking easy and accessible.

Advantages

• Liquidity: Lido Staked SOL lets you stake your SOL tokens while still keeping them liquid. You receive stSOL tokens that represent your staked SOL plus rewards, which you can trade or use as collateral in DeFi.
• Ease of Use: The platform offers a simple, user-friendly interface for staking without technical complexities.
• Rewards: You earn staking rewards with an APR around 5.5%, which are automatically compounded as your stSOL balance grows.
• Multi-Chain Support: Lido supports staking on multiple blockchains, including Solana.
• Security: Lido smart contracts are regularly audited by firms like Quantstamp and Sigma Prime, and node operators are experienced.
• DeFi Integration: stSOL tokens can be used in various DeFi applications, increasing capital efficiency.
• No Lock-Up: You can unstake any time, and your staked SOL remains functional in the Solana ecosystem.

Disadvantages

• Fees: Lido takes a 10% commission on earned staking rewards.
• Centralization Concerns: Lido’s staking pool is managed by a limited number of validators (around 30), which raises some centralization issues.
• Validator Commission: Validators run by Lido operate at 100% commission, sharing rewards with Lido before passing them to stakers.
• Competition: Other protocols like Marinade or Jito may offer more optimized staking within the Solana ecosystem.
• Lower Yield Compared to Solo Staking: Solo staking can be more profitable than staking through Lido, as Lido’s fees reduce overall returns.

Founders

Lido Staked SOL was founded by Jordan Fish, Vasiliy Shapovalov, and Konstantin Lomashuk in December 2020.

Background

They created Lido and its DAO to solve issues like illiquidity and high minimum staking requirements, such as Ethereum’s 32 ETH minimum to run a validator.

Purpose

Their goal was to make staking easier and more accessible by allowing users to stake without locking up assets and to use staked tokens in DeFi applications.

Investors in Lido Staked SOL

Lido Staked SOL is supported by a broad community of crypto investors who stake their SOL tokens through Lido's liquid staking protocol. These investors receive stSOL tokens representing their staked SOL plus rewards, which they can trade or use in DeFi applications. The investors include:

• Individual Crypto Holders: People who stake their SOL tokens to earn rewards while keeping liquidity through stSOL.
• DeFi Users: Investors who use stSOL as collateral or trade it on decentralized exchanges like Meteora, Orca, and Raydium.
• Validators: Lido delegates staked SOL evenly among invited validators who run nodes and help secure the Solana network.
• Institutional Investors: Though more prominent in Ethereum staking, institutions also participate indirectly through liquid staking protocols like Lido.

Lido’s staking pool is decentralized with many validators sharing the stake, and investors benefit from the flexibility and liquidity of their staked assets.

Halal Status

No. Lido Staked SOL is generally considered not 100% halal because the staking rewards may include fees from transactions that could involve impermissible activities like riba (interest). This means the income earned is not fully pure from an Islamic finance perspective.

Reasoning

The staking rewards come partly from network inflation and transaction fees. Some transactions validated by the network may enable haram activities, which affects the purity of the yield. Therefore, while staking itself is a halal service, the overall income from Lido Staked SOL is not completely free from impermissible elements.