Solana’s Liquid Staking Set to Surge as Retail Investors Join In

Solana’s liquid staking could surge to $18 billion as retail investors embrace its liquidity and flexibility.

Solana’s (SOL-USD) liquid staking is on the brink of a major breakthrough, with predictions suggesting a potential fivefold increase in value, possibly reaching $18 billion. This optimism is rooted in the growing appeal of liquid staking among retail investors, driven by its superior liquidity and capital efficiency compared to traditional staking methods. Bybit Researchhighlights that Solana’s active staking community positions it well for this surge. According to their report shared with Cointelegraph, “Solana has a huge potential for liquid staking due to its active staking community.”

Retail Adoption Fuels Market Growth

Liquid staking allows investors to receive a token equivalent to their staked assets, which can then be used across various decentralized finance (DeFi) applications. This flexibility is a key factor driving retail adoption. Currently valued at over $3.8 billion, the Solana-based liquid staking market could see a dramatic increase if it follows the trajectory of Ethereum’s market, which boasts over $39.5 billion in liquid staking total value locked (TVL).

Solana Avoids Centralization Pitfalls

Unlike Ethereum’s liquid staking sector, which faces centralization risks with Lido controlling over 57% of the market, Solana’s diverse player base mitigates these concerns. Bybit Research notes that Solana’s liquid staking environment is less likely to experience similar centralization issues, thanks to its varied participant base. As Bybit Research explains, “The outsized concentration from a single party from Ethereum won’t repeat in Solana.”

Retail Investors Drive Future Growth

With mainstream exchange-backed liquid staking tokens expected to bridge casual users with DeFi opportunities, Solana is poised for substantial growth. As stated in the report, “Mainstream exchange-backed LSTs will break down barriers and become the de-facto bridge between casual users and the DeFi opportunities in Solana.” If retail investors embrace these innovations, Solana’s liquid staking market could indeed reach new heights.

At the time of writing, Solana is sitting at $135.48.