Solana News Today: Sanctum Builds Staking and Transaction Empire on Solana

Liquid staking on the Solana blockchain has seen a significant surge, with liquid staking positions reaching a record high of 5.7 million SOL, representing 13.6% of the total staked supply. This growth has been largely driven by innovations from protocols such as Sanctum, a key player in the Solana ecosystem. Unlike Ethereum, where liquid staking has been dominated by a few major tokens like Lido’s stETH, Solana’s landscape is characterized by a proliferation of liquid staking tokens (LSTs). This divergence stems from Solana’s unique technical architecture, which allows for more flexible and scalable liquid staking solutions [1].

Sanctum, formerly known as Socean, has emerged as a central force in this space by offering a white-label issuance service that enables any entity to launch its own LST. This approach eliminates the need for individual stakers or issuers to maintain large liquidity reserves to meet potential redemption demands. Instead, the protocol provides a shared liquidity reserve that all LST issuers can access. This system reduces the marginal cost of creating new LSTs to nearly zero, allowing for rapid proliferation of tokens within the ecosystem [1].

A critical component of Sanctum’s offering is its automated market maker (AMM) called Router, which facilitates seamless swapping between thousands of LSTs. Unlike traditional AMMs that rely on liquidity pools, Router operates by moving stake positions at their intrinsic value, akin to a clearing network. This mechanism ensures that swaps are executed without exposure to impermanent loss, a common challenge in decentralized exchanges. When necessary, Router can tap into a shared pool known as Infinity, which contains thousands of LSTs, further enhancing the system’s liquidity [1].

The Infinity pool also serves as a revenue-generating mechanism for Sanctum. By taking a small fee from each swap and routing it to INF, a yield-bearing product composed of a basket of whitelisted LSTs, the protocol enhances its financial sustainability. INF has historically outperformed other major LSTs on Solana, such as JitoSOL, largely due to this additional revenue stream and the curated nature of its underlying assets. This model has enabled Sanctum to become one of the few liquid staking protocols in the space that generates consistent annualized revenues, currently estimated at approximately $5.9 million [1].

In addition to expanding its liquid staking capabilities, Sanctum recently announced a broader push into Solana’s transaction-delivery layer with the launch of its v2 initiative. At the core of this expansion is Gateway, a transaction delivery aggregator that aims to enhance transaction inclusion and observability. Gateway leverages the recent acquisition of the DevOps infrastructure platform Ironforge to provide full-stack transaction observability and routing across multiple providers. This service will operate on a pay-as-you-go model, with optional tipping features, rather than a traditional subscription-based approach [1].

The goal of Gateway is to serve as the de facto entry point for Solana transactions, improving network efficiency and reducing latency. This strategic expansion underscores Sanctum’s ambition to not only dominate the liquid staking space but also to play a foundational role in Solana’s broader infrastructure. As the protocol continues to integrate new services, it is positioning itself as a key infrastructure provider in the Solana ecosystem, with potential implications for transaction throughput and user experience [1].

Source:

[1] Sanctum V2 Expands to Solana's Transaction Delivery Layer (https://blockworks.co/news/sanctum-v2-expands)