Binance has invested in Solana’s liquidity staking protocol, Solayer. The platform now manages over $156 million in assets—here’s why.
Crypto developers and blockchain operators are going green.
Modern blockchains are more environmentally conscious than legacy chains like Bitcoin and Litecoin, which still operate energy-intensive proof-of-work networks.
These leaders advocate for energy efficiency and high performance.
After nearly seven years, Ethereum migrated to a proof-of-stake consensus algorithm, powering off the proof-of-work. Over one million node validators are now tasked with securing the network. For their participation, they earn an annual, near-risk-free yield.
Liquidity Staking Boom After Ethereum Merge
However, not everyone can commit the 32 ETH required. Because of this, liquidity-staking platforms like Lido Finance and Rocket Pool have filled the gap, allowing anyone, even those with 1 ETH, to earn a share of the annual yield.
Through these platforms, there is flexibility since stakers can stake and unstake their coins anytime, unlike in traditional setups where they must lock assets for a given period.
Every time one chooses to stake their assets via any of these providers, they receive a derivative of the asset. Interestingly, this derivative can be traded on leading exchanges.
The success of Lido Finance and similar protocols has inspired other developers operating in competing networks, mainly Solana.
Like Ethereum, users can stake and earn an annual yield. Node operators are automatically stakers, and they, besides having an opportunity to receive block rewards, also get a yield.
Notably, these node operators are heavily incentivized by the Solana Foundation.
Binance Labs Bets Big On Solayer
Sensing an opportunity, Binance Labs, the investment wing of the world’s largest exchange by trading volume and client count, recently invested in Solayer, a liquidity staking platform on Solana.
Like its counterpart in Ethereum, Solayer aims to secure Solana further while enhancing scalability.
At the core, and as expected, users who use Solayer will earn a yield and freely stake or unstake.
Binance Labs didn’t specify exactly what drew them to invest.
However, what’s clear is that Solayer is one of the fastest-growing liquidity staking platforms on Solana.
After launching their phase 1, it is now the 13th largest protocol by assets under management, according to DefiLlama.
(Source)
Data reveals at present Solayer now manages over $156 million.
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Future Plans For Solayer Solana Liquidity Staking
Binance also didn’t mention the investment they sunk into the project.
Nonetheless, Solayer will use these funds to scale the team, onboard new protocols, and cement its position as one of the top platforms on Solana.
Other plans include introducing general asset restocking. In this way, users would be free to stake assets from other chains, including ETH or AVAX, for instance, on Solana.
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Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.
