What is Solayer? sSOL Explained

What is Solayer?

Solayer is a restaking platform on the Solana blockchain designed to enhance decentralized applications (dApps) by offering restaking through stake-weighted quality of service (QoS) and transaction prioritization. It allows users to convert their SOL into sSOL, a liquid staking token that secures block space, maintains liquidity, and provides additional yield through DeFi strategies.

Unlike other restaking platforms like EigenLayer, Solayer is built specifically for Solana-native applications, supporting endogenous Actively Validated Services (AVSs). This alignment with Solana’s infrastructure gives Solayer a strong advantage in optimizing dApp performance and securing network resources.

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How Does Solayer Work?

Solayer operates as a restaking marketplace, enabling decentralized applications on the Solana blockchain to leverage stake-weighted quality of service (QoS) for transaction prioritization and resource allocation. According to the project's litepaper here are the main components:

• Restaking Mechanism: Users restake their SOL tokens into Solayer’s platform, converting them into a liquid-staked form (sSOL), which is delegated to validators.
• AVS Token: Solayer mints AVS tokens for dApps, representing the staked assets (sSOL), which can be used to secure block space and prioritize transaction processing.
• Stake-weighted Quality of Service: Validators allocate network resources such as block space and transaction processing capacity based on the amount of stake delegated to a dApp.
• Transaction Prioritization: Transactions sent by dApps are prioritized based on their stake weight, ensuring faster processing by validators.
• Unstaking and Rewards: Users can unstake their AVS tokens to retrieve staked SOL and collect Solana PoS yields as well as AVS rewards.
• Super Liquidity: Solayer offers a pooled liquidity design for AVS tokens, which allows users to convert back to SOL quickly and with minimal slippage.

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Solayer Airdrop

Solayer has not launched its native token yet, but early participants may be eligible for a future airdrop. Users who restake SOL on the platform and engage with the ecosystem are likely to benefit when the token is introduced. The token is expected to serve governance and utility purposes within the ecosystem, offering further incentives.

To increase the chances of receiving an airdrop, users should actively restake SOL for sSOL and participate in multiple staking epochs. Criteria such as the duration of staking, amount of SOL restaked, and engagement with the platform could impact the potential airdrop allocation.

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What is sSOL?

sSOL is Solayer’s Liquid Restaked Token (LRT), issued to users who restake their SOL through the platform. When users deposit SOL, it is converted into sSOL, which can be utilized across various decentralized protocols and staking services. sSOL allows users to earn additional annual percentage yield (APY) while maintaining liquidity and flexibility.

In addition to the native SOL, users can deposit LSTs like Marinade Staked SOL (mSOL), Jito Staked SOL (JitoSOL), and Bybit Staked SOL (bbSOL), each offering specific APYs. These tokens can be used across Solana’s DeFi protocols, allowing users to enhance their staking rewards while maintaining liquidity in various staking pools and strategies.

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What Can You Do With sSOL?

Currently, there are three DeFi strategies to use sSOL within the Solayer ecosystem:

• Provide liquidity on Orca: Stake sSOL in a liquidity pool paired with SOL to earn additional rewards through both Solayer and Orca’s boost programs.
• Vault strategy on Kamino: Utilize the sSOL/SOL pair to engage in a vault strategy, benefiting from automated yield optimization and Solayer Boost.
• Deposit into Save lending pool: Supply sSOL into a lending pool to earn interest, increasing returns while supporting lending and borrowing activities.

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Solayer Team

Solayer was co-founded by Jason Li, who is also the lead engineer of the project. The team comprises industry veterans with extensive expertise in distributed systems, cryptography, and decentralized finance. They have previously made contributions to high-profile blockchain projects and are currently dedicated to developing Solayer's innovative restaking infrastructure on Solana.

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Funding

In late August 2024, Solayer raised $12 million in a seed round led by Polychain Capital, with additional participation from investors like Big Brain Holdings, Hack VC, and Nomad Capital. This funding round valued Solayer at $80 million at the time. Additionally, Binance Labs also invested in Solayer, providing strategic support to help scale the team and onboard new protocols, though the exact amount wasn't disclosed.

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Bottom Line

Solayer introduces a fresh approach to restaking within the Solana ecosystem, offering dApps the ability to prioritize transactions and secure block space through its stake-weighted quality of service model. By focusing on native Solana applications, it addresses the specific needs of the network without introducing additional slashing risks.

The platform’s unified liquidity design also helps minimize slippage across liquid staking derivatives, enhancing flexibility for users. With its blend of security, performance optimization, and liquidity management, Solayer might monopolize the restaking sector for itself on Solana.