A new platform within the liquid-staking market is getting a huge wave of adoption, offering exciting money-making opportunities for users and potential airdrop farmers. 

With this innovative product, you can earn exciting APYs and stand a chance to receive an airdrop from one of the most exciting projects in Solana DeFi. 

It also brings gamification to Solana DeFi, and meme lovers will surely find this interesting.

Wanna know more? 

Let's dive in 

TLDR

• Sanctum is a DeFi protocol on the Solana blockchain that enhances liquid staking. 
• One of Sanctum's key innovations is its unified liquidity pool, which allows an infinite number of LSTs to be added to a single pool. 
• Sanctum has shown significant traction within the Solana community, with TVL exceeding $700 million.
• Sanctum supports the creation of custom LSTs with unique offerings, including meme-based LSTs like dogwifSOL, adding a fun element to staking and potentially attracting different community supporters.
• While Sanctum does not currently have its own token, it operates a points system that hints at a potential future airdrop.

Disclaimer: This is not financial or investment advice. You are responsible for any capital-related decisions you make, and only you are accountable for the results. "One Glance" by Cryptonary sometimes uses the RR trading tool to help you quickly understand our analysis. These are not signals, and they are not financial advice.

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A quick primer on liquid staking

If you have been in crypto for more than a few months, you'll most likely know that Solana is a high-performance blockchain platform that aims to solve the scalability issues faced by older blockchain networks, such as Ethereum.

However, to achieve that, Solana relies on a unique blockchain design that combines two consensus algorithms: Proof-of-History (PoH) and Proof-of-Stake (PoS)

PoH is a cryptographic clock that timestamps transactions before they are added to the blockchain. PoS, on the other hand, is a consensus mechanism that ensures network participants reach an agreement on the blockchain's state. 

In Solana's PoS implementation, validators are selected to propose the next block based on the number of SOL tokens they have staked. 

However, similar to other PoS blockchains, this approach is highly capital-inefficient and inconvenient for users.

Lido pioneered the concept of liquid staked tokens (LSTs) in 2020 to address these challenges. Since then, it has emerged across many blockchains, including Solana. 

Liquid staking found an almost perfect product-market fit, and it is by far the biggest category in DeFi.

Unlike traditional staking, where assets are locked up, LSTs are derivative tokens that can be used in various DeFi applications. These tokens are pegged to the value of the underlying staked asset and offer flexibility and efficiency in capital allocation. 

However, these are "pegged" tokens, and in extreme market conditions, they can de-peg (lose value compared to the underlying asset) if liquidity is insufficient in secondary markets.

Lack of liquidity can create cascading liquidations and further exaggerate the de-peg. Therefore, to avoid such scenarios, all LST providers compete for liquidity, which makes the overall liquidity of LSTs very fragmented.

This new LST platform addresses liquidity fragmentation. It seems to have found the secret sauce to enable stability and unify liquidity in the LST sector.

Introducing Sanctum

Sanctum is a DeFi protocol that facilitates liquid staking on the Solana blockchain. As we mentioned, this enables users to earn staking rewards while still having the flexibility to use their staked assets in other DeFi activities.

Sanctum aims to bring LST liquidity on Solana to a whole new level.

How?

Sanctum allows validators to create their own LSTs while it serves as the unified liquidity layer. Unified liquidity means that instead of having separate liquidity pools for individual LSTs (which is how liquidity pools generally work), Sanctum allows all LSTs to be added to the same pool. Therefore, Sanctum can support millions of LSTs being added to the liquidity pool.

This allows for the seamless swapping of LSTs, regardless of their type, popularity, or liquidity available. It avoids liquidity fragmentation and brings stability to Solana's LST market.

The project has gained significant traction within the Solana community, raising $6.1 million in funding from notable investors like Dragonfly, Solana Foundation, and Sequoia. 

Sanctum's impressive growth rate 

Santum's seems to have found a very strong product-market fit. Its TVL has been exploding recently and reached over $700m.

The daily number of transactions and users has been trending up as well. People are realising the value of Sanctum and actively using its infinity pool to swap between various LSTs.

The number of INF holders (native LST of Sanctum) is growing exponentially, signalling a strong product-market fit.

Despite already impressive numbers, we believe Sanctum still has massive room for growth.

The total mcap of staked Solana is almost $70b, and only 6% of that $70b is currently liquid staked. 

We believe Sanctum can unlock massive capital in the Solana ecosystem by facilitating liquidity in the LSTs market and letting any validator create a custom LST with its own structure.

All this information above sounds exciting, but you probably want to know how all of these benefit you. 

Read on…

Unlocking potential in custom LSTs

Sanctum offers a unique opportunity to maximise earnings through custom liquid staked tokens (LSTs). Here's how you can benefit:

Diverse LST options 

Sanctum facilitates the creation of custom LSTs with unique offerings and unified liquidity that can support millions of different LSTs. There are currently over 30 different LSTs with various structures. For example, jupSOL is a liquid staking token that tracks the value of SOL staked to Jupiter's Solana validator. It has a 0% fee and a 100% MEV rebate, which makes jupSOL one of the highest-yielding LSTs.

Enhanced user experience

Sanctum makes it easy for LST providers to offer a better service experience to users. For instance,  jupSOL charges a 0% fee, but how is that possible? It all boils down to the fact that the whole purpose of jupSOL isn't to make money by offering an LST but to improve the UX for Jupiter users. Therefore, Jupiter can charge 0% fees as long as it attracts the most capital. The more stake Jupiter's validator has, the easier it is for Jupiter to send successful transactions into a congested network, which means users can get their orders filled quicker. 

Support ecosystem projects 

Sanctum facilitates LSTs from various ecosystem players. Investing in these LSTs allows you to support projects you believe in while earning competitive yields. For instance, apart from Jupiter's LSTs, you can use and support other ecosystem players like Drift, MarginFi, etc. This is how Sanctum introduces gamification to the LST market.

Maximise your earnings 

If your primary goal is to maximise profits, INF, the native LST of the Sanctum platform, remains the highest-yielding LST in the market. It charges no fees, and the yield it generates is a function of the average yield by all LSTs in the infinity pool and trading fees generated by traders of these LSTs.

LSTs for memes

Beyond all the value that Santum facilitates in Solana's LST market, Sanctum also understands that securing the Solana network should be profitable, stable, and fun. 

For this reason, Sanctum has partnered with the three largest meme communities on Solana to create meme-based LSTs with unique reward structures:

• bonkSOL: A validator backed by the BONK community. Supporters of this validator will get BONK rewards. Additionally, rewards from securing the Solana network will be used to buy-back and burn BONK. If you are a strong supporter of the BONK community, staking with bonkSOL is a great option.

• dogwifSOL: And finally, an LST for the WIF community. The mechanics of dogwifSOL are very interesting. All rewards from staking SOL with dogwifSOL are used to buy-back WIF and airdropped to the LST holders every ~2 days. If you've been waiting for an opportunity to add some WIF to your portfolio, this might be it.

• wenSOL: An LST for the WEN community. Holders of wenSOL can expect unique NFTs airdrops and $WEN rewards.

It is hard to tell which of these LSTs will yield the highest returns because that would depend on the prices of the respective memecoins they support, and memecoins tend to be very volatile. 

But if you were previously scared of buying memes with your own money, buying memecoins LSTs will keep your exposure to SOL and let you build up a decent position in memecoins without directly spending money on them. Sounds fun? We think it is.

Overall, Sanctum looks like a very important player in the Solana ecosystem. It offers innovative and engaging products while growing its user base and TVL.

All signs suggest that Sanctum is a great platform with huge potential.

But is it an attractive investment opportunity? 

Unfortunately, Sactum doesn't have a token yet. 

However, it does have a points system that signals potential airdrops.

A fresh airdrop opportunity

We anticipate the launch of Sanctum's token on the Jupiter Launchpad. Until then, you can position yourself for a potential airdrop.

Here is how to do it.

Action plan

1. Go to Sanctum and click on "Join Now."
2. Choose any LST (pet) that you want to support, and stake SOL (buy with SOL) for an LST
3. If you are a meme-lover, you can also stake your SOL with meme-based LSTs
4. Happy farming

Note: We found some data on the number of SOLs that people are staking with Sanctum. The graph shows that the majority of users stake less than 1 SOL. 

Note: With airdrops, sometimes you need to outcompete others to receive a bigger allocation. This graph shows that if you stake around 1 SOL, you can "outfarm" most users. 

Therefore, we recommend staking around 1 SOL with Sanctum (The more, the better) if you intend to farm this airdrop.

Cryptonary's take

Sanctum is becoming one of Solana's key infrastructure pieces. It is bringing stability and robustness to the LST market, unifying liquidity, and allowing the creation of custom LSTs that aren't possible anywhere else.

Sanctum's main LST, "INF", is the highest-yielding LST on Solana.

Furthermore, custom LSTs are bringing unique use cases, further increasing the adoption of the Sanctum platform.

We are bullish on Sanctum; however, there is no token to invest in, yet. Therefore, airdrop staking for juicy APYs, earning memecoins, and farming points are the best way to position ourselves for its success. 

Until the Sanctum token launches, 

Cryptonary, OUT