Jupiter Lend Unlocks $30B in Staked SOL Liquidity
Solana DeFi protocol Jupiter Lend has introduced a feature allowing natively staked SOL to be used as collateral. This development unlocks over $30 billion in previously illiquid capital for use in DeFi. The move enables Solana stakers to access lending and other strategies while continuing to earn staking rewards.
- The new feature works by representing natively staked SOL from six initial supported validators—Jupiter, Helius, Nansen, Blueshift, Kiln, and Temporal—as on-chain "nsTOKEN" vaults. - Users can borrow up to 87% of their staked position's value, with a liquidation threshold set at 88%; staking rewards continue to compound in the background. - This mechanism bypasses the need for liquid staking tokens (LSTs), directly targeting the vast majority of staked SOL, as LSTs only account for about 13.7% of all staked SOL on the network. - The risk profile for borrowers is different from typical DeFi lending; since both the collateral and debt are SOL, liquidation risk is primarily driven by borrow interest rates exceeding the staking APY, not price volatility. - This launch is an alternative to Jupiter's existing liquid staking token, jupSOL, which was developed in partnership with the liquidity protocol Sanctum to offer MEV-boosted yields. - Immediately following the announcement, Jupiter's Total Value Locked (TVL) saw an increase, rising to approximately $2.14 billion, indicating fresh capital allocation to the protocol. - Prior to this, the main way to utilize staked SOL in DeFi was through LST protocols like Jito (which holds the largest market share), Marinade Finance, and Lido.
