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<h4><b>Imagine you staked your assets on Solana and have zero liquidity. LSTs on Solana give you unique tokens you can use till you get your reward from your staked asset. </b></h4> 
<p>That’s the essence of LSTs on Solana. <span style="font-weight: 400;">Read on to grasp this concept and see how it can be helpful to you.&nbsp;</span></p> 
<h5><b>What are LSTs?</b></h5> 
<p><a href="https://www.bitcoin.com/get-started/what-is-a-liquid-staking-token/" target="_blank" rel="noopener"><span style="font-weight: 400;">LSTs</span></a><span style="font-weight: 400;"> (Liquid Staking tokens) represent your staked assets. So, LSTs offer liquidity along with rewards. Your assets lock up when you stake SOL, increasing your rewards. But this makes the staked assets unavailable for immediate use. LSTs change that by giving you tokens, you can use anytime while your Solana is still staked.</span></p> 
<p><span style="font-weight: 400;">LST is a product of Solana’s consensus mechanism, </span><a href="https://www.ledger.com/academy/what-is-delegated-proof-of-stake-dpos"><span style="font-weight: 400;">DPOS</span></a><span style="font-weight: 400;">. DPOS inspired the creation of LSTs through stake pools and validators.&nbsp; Here is a good thread about LSTs:</span></p> 
<blockquote class="twitter-tweet" data-width="550" data-dnt="true"> 
 <p lang="en" dir="ltr">I spent the last month fielding questions in the Sanctum (<a href="https://twitter.com/sanctumso?ref_src=twsrc%5Etfw">@sanctumso</a>) Discord about LSTs and staking.</p> 
 <p>I bring you two glorious whiteboard explainers in one…</p> 
 <p>Why staking with LSTs on Solana is safer than you think and why CHADS laugh at 'de-peg risk'.</p> 
 <p>What to expect:<br>– How… <a href="https://t.co/GwACoZXUpk">pic.twitter.com/GwACoZXUpk</a></p> 
 <p>— James Hanley (@JamesleyHanley) <a href="https://twitter.com/JamesleyHanley/status/1787875006439207060?ref_src=twsrc%5Etfw">May 7, 2024</a></p>
</blockquote> 
<p><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script></p>  
<p><span style="font-weight: 400;">With this method, you can deposit SOL into the stake pool. The stake pool invests your SOL in different validators. In return, you get LSTs (unique tokens) representing your staked assets, such as <a href="https://www.coingecko.com/en/coins/jito-staked-sol" target="_blank" rel="noopener">JitoSOL</a>. Each stake pool works by setting different strategies for rewarding participants. JitoSOL has its staking </span><a href="https://www.jito.network/docs/jitosol/stake-delegation/" target="_blank" rel="noopener"><span style="font-weight: 400;">strategies</span></a><span style="font-weight: 400;">.&nbsp;</span><span style="font-weight: 400;">Let’s take a look at LSTs’ token mechanics:</span></p> 
<h6><b>1) LST Token Mechanics</b></h6> 
<p><span style="font-weight: 400;">LST tokens function like Ethereum (ERC-20) tokens, with a few differences. You either get rewards or adjust your token amount to see the rewards you earn over time. </span><a href="https://www.jito.network/blog/reward-bearing-vs-rebasing-solana-liquid-staking-tokens/" target="_blank" rel="noopener"><span style="font-weight: 400;">Rebasting LSTs</span></a><span style="font-weight: 400;"> is yet to be available on Solana.&nbsp;&nbsp;</span></p> 
<h6><b>2) LST Usage on Solana</b></h6> 
<p><span style="font-weight: 400;">LST on Solana is getting started. People are yet to become familiar with the significance of Solana LSTs. In no time, users will see that Solana’s LSTs are valuable liquidity means, and more people will get into them. Here is another good summary about LSTs:</span></p> 
<blockquote class="twitter-tweet" data-width="550" data-dnt="true"> 
 <p lang="en" dir="ltr">Wrote some words about the liquid staking landscapes on Ethereum and Solana + <a href="https://twitter.com/sanctumso?ref_src=twsrc%5Etfw">@sanctumso</a>, a protocol rethinking liquid staking on Solana from the ground up.</p> 
 <p>I love this chart because of how clearly it captures the evolution of LSTs on Solana.</p> 
 <p>– Initially, <a href="https://twitter.com/LidoFinance?ref_src=twsrc%5Etfw">@LidoFinance</a>, a… <a href="https://t.co/CyJ2SnklWH">pic.twitter.com/CyJ2SnklWH</a></p> 
 <p>— Shlok Khemani (@shloked_) <a href="https://twitter.com/shloked_/status/1790043808681390463?ref_src=twsrc%5Etfw">May 13, 2024</a></p>
</blockquote> 
<p><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script></p> 
<p><span style="font-weight: 400;">There is more to LSTs on Solana. The <a href="https://www.altcoinbuzz.io/bitcoin-and-crypto-guide/introduction-to-liquid-staking-and-lsts-on-solana-part-2/" target="_blank" rel="noopener">second part</a> of this article dives deeper into what it entails. Also, you can read more about it in this <a href="https://www.helius.dev/blog/lsts-on-solana" target="_blank" rel="noopener">blog post</a>.</span></p> 
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<h6><strong>Disclaimer</strong></h6> 
<p>The information discussed by Altcoin Buzz is not financial advice. This is for educational, entertainment, and informational purposes only. Any information or strategies are thoughts and opinions relevant to the accepted levels of risk tolerance of the writer/reviewers and their risk tolerance may be different than yours. We are not responsible for any losses that you may incur as a result of any investments directly or indirectly related to the information provided. Bitcoin and other cryptocurrencies are high-risk investments so please do your due diligence. Copyright Altcoin Buzz Pte Ltd.</p> 
<p>The post <a href="https://www.altcoinbuzz.io/bitcoin-and-crypto-guide/introduction-to-liquid-staking-and-lsts-on-solana-part-1/">Introduction To Liquid Staking And LSTs On Solana – Part 1</a> appeared first on <a href="https://www.altcoinbuzz.io">Altcoin Buzz</a>.</p>

Introduction To Liquid Staking And LSTs On Solana – Part 1

Altcoin Buzz

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