Solana DeFi Kamino Finance and Lido Finance Protocols Optimize Network Decentralization Through Liquid Staking

Kamino Finance and Lido Finance strive to increase liquidity and decentralization on Solana through liquid staking.

Kamino Finance integrates Lido’s stSOL liquid staking into its platform for increased network decentralization and security.

LONDON, UK, October 31, 2022 / — The protocols of decentralized finance (DeFi) Kamino Finance and Financing of the Lido have developed a new method to help increase the decentralization and security of Solana. Instead of swapping SOL to stSOL to balance liquidity deposits, Kamino will start staking SOL to stSOL directly via Lido, increasing the number of SOLs delegated to Solana validators.

Lido Finance is the largest liquid staking token platform in all of DeFi. Lido holds the second-highest total value locked (TVL) in DeFi, with over $7 billion in staked assets. Lido’s stSOL is responsible for helping to stake over four million SOL tokens with a growing variety of validators that secure Solana’s decentralized network.

Kamino Finance provides automated vaults that manage Solana-focused liquidity positions. These positions generate fees for users who deposit their tokens to facilitate trading on Solana’s decentralized exchanges (DEXs), increasing overall DeFi liquidity on Solana while providing yield opportunities for all users.

Lido allows users to stake their SOL and participate in DeFi with an interest-bearing token, stSOL, representing SOL plus rewards earned from staking, currently at around 5.5% APY. The protocol stakes the underlying SOL of stSOL with validators outside of the Solana superminority, or number of parties that must conspire to replace the network, which currently stands at 31.

“Lido has been a great ecosystem partner,” said Mark Hull, one of Kamino’s main contributors. “We are excited to be able to contribute to the amount of staked SOLs securing Solana while helping to decentralize the network.”

Hull said, “Lido’s great effort to ensure SOL is staked as efficiently as possible goes hand-in-hand with Kamino’s mission to optimize DeFi capital efficiency on Solana. The collaboration between Lido and Kamino is a step in the right direction for DeFi composability, decentralization and adding value to Solana’s user experience.

At the time of writing, Kamino’s stSOL-SOL Vault earns users about 6% APY through trading fees on Orca’s Concentrated Liquidity Eddies. Additionally, users can earn 12% APY from LDO rewards on top of the return generated from trading activity.

Akil Qureshi
Hubble Protocol
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