Today, your sSOL received after restaking will be made unfrozen and liquid. This will unlock a number of DeFi integrations, starting with liquidity provision on Orca.

Please find links below for deposit:

• Orca: https://www.orca.so/ 

• DeFi: solayer.org/defi 

But firstly… 

What is sSOL? 

sSOL is the universal liquidity layer for delegates (dApps) and LRTs on Solayer. Every unit of SOL can be perceived as a unit of blockspace lent towards dApps, securing network bandwidth and TPS.

The stake delegated towards dApps, which derives an AVS SPL token, is built on top of sSOL-SOL liquidity. Similarly, LRTs are built on top of sSOL liquidity interface to generate vault strategies. 

There are various ways of utilizing sSOL and earning maximum yield as an sSOL Holder. You can delegate to dApps to bootstrap network bandwidth or participate in DeFi strategies to earn additional APY, starting with our launch partners.

Now we will go through a couple of examples on how you can put your sSOL to work in AMMs, lending protocols, perpetual exchanges, and more.

What can you do on Orca?

Liquidity Provision

Link: https://www.orca.so/ 

Orca utilizes a Concentrated Liquidity Automated Market Maker (CLAMM) to enhance capital efficiency and yield for liquidity providers. By providing liquidity to Orca's pools, users can earn yield on their crypto assets through trading fees.

When you provide liquidity to an Orca pool, such as the sSOL-SOL pair, you earn fees from each token swap within that pool. This means if you deposit sSOL and SOL into the pool, any trades that occur between these tokens will generate fees, which are distributed to you as a liquidity provider. Orca automates this process, ensuring optimal capital efficiency and low slippage.

LP Example

Situation: You have 100 sSOL worth $10,000 USD. You want to earn yield on your assets without active management.

Use Case: Deposit your sSOL and an equivalent amount of SOL into an Orca CLAMM pool. Your sSOL and SOL will provide liquidity to the DEX, earning fees from trading volume. Orca’s advanced CLAMM technology will ensure that your assets are utilized efficiently, maximizing your returns.

Benefit: Earn yield passively from trading fees while maintaining exposure to both sSOL and SOL.

FAQs

What is sSOL and how can I use it in DeFi protocols?

sSOL is the universal liquidity layer for delegates dApps and LRTs on Solayer. Every unit of SOL can be perceived as a unit of blockspace lent towards dApps, securing network bandwidth and TPS. 

Where can I trade sSOL-SOL pairs?

sSOL-SOL pairs are available for trading on Raydium and Orca. We will also list these pairs on our DeFi page for easy access. More protocol integrations will be announced soon.

Can I transfer sSOL to other wallets or dApps?

Yes, users can transfer sSOL to other wallets or dApps. However, please note that transferring sSOL may affect your ability to accrue points, as detailed below.

Will I continue to earn rewards if I hold or transfer sSOL?

Points will continue to accrue as long as sSOL is held in the user’s wallet or deposited into a whitelisted dApp. If sSOL is deposited elsewhere or transferred, users will stop earning points.

How will I know if a dApp is whitelisted for earning rewards with sSOL?

A list of whitelisted dApps will be provided on our official socials and documentation. Make sure to check the latest updates to ensure you are earning points while using sSOL.

Are there any accounting system updates?

Solayer is dedicating launch partner boost for participants of Kamino, Orca, and Drift. This will be claimable in an updated snapshot in Episode 2. 

Warning: Creating pools/vaults are permissionless in various DeFi protocols. However, Solayer currently only accounts for participants in Orca, Kamino, and Drift, and their continued reward status on Solayer. As liquidity matures, we will expand into cohort 2 integration partners. 

Important Considerations

1. Transfer of sSOL

   Transferring sSOL from your original wallet to another wallet will freeze your status on Solayer, discontinuing your accounting. This means you will stop generating rewards until the sSOL is returned to an approved wallet.

   
   

2. Protocol Restrictions

   If you deposit sSOL in any pools or protocols outside of our initially whitelisted partners (Drift, Kamino, and Orca), accounting will again discontinue. We will onboard more protocols in phases, ensuring seamless integration.

   
   

How is sSOL different from other LSTs? 

sSOL stands out from other Liquid Staked Tokens (LSTs) due to its role as the underlying Liquid Restaked Token (LRT) for all AVS tokens and upcoming yield vault strategies on Solayer. 

Here are the key factors that differentiate sSOL:

1. Underlying LRT for AVS Tokens:

   sSOL serves as the foundational LRT for all AVS tokens, providing a crucial layer of liquidity and interoperability within the Solana ecosystem. This integration allows for seamless interactions across various protocols and yield strategies.

2. Optimized for Yield Vault Strategies:

   sSOL is specifically designed to be utilized in advanced yield vault strategies, maximizing returns for stakers through optimized liquidity provision and automated management.

   
   

What is the importance of liquidity? 

Liquidity is the most critical factor for the adoption of any asset, particularly for LSTs like sSOL. 

Two key considerations for liquidity are:

1. Conversion Delay

   This refers to the time it takes to convert sSOL back to SOL or other assets. Minimizing conversion delays is essential for maintaining the attractiveness and utility of sSOL.

2. Slippage

   Slippage occurs when the actual executed price of a trade differs from the expected price. Low slippage is crucial to ensure users can convert their sSOL with minimal losses.

   In an ideal scenario, there would be no slippage and instant conversion, making sSOL highly preferable over traditional SOL holdings for all Solana users. However, the main barrier to this ideal state is the liquidity of LSTs which will be solved by our sSOL-SOL pool mechanism. 

What are the risks? 

1. Smart contract vulnerabilities: There is always the possibility of an exploit in smart contracts. To mitigate this Solayer was already audited by Ottersec . Nevertheless, Solayer strongly encourages taking the time to understand the risks before trading.

2. Divergence loss (impermanent loss): As token prices diverge from their deposit values, liquidity value falls in comparison to holding the same tokens in a wallet. Through volatility, deposited liquidity can be worth less at withdrawal than at deposit: price action can cause liquidity providers to lose money. The risk of divergence loss is amplified in concentrated liquidity pools which is the case when using Orca. 

3. Depeg: Pegged tokens are designed to maintain a stable value relative to an underlying asset. However, they can lose this peg during adverse market conditions or black swan events, potentially resulting in significant losses. Depeg events can cause these tokens to deviate from their intended value, similar to how divergence loss (impermanent loss) affects liquidity providers. When token prices diverge from their deposit values, the value of liquidity can fall compared to holding the tokens in a wallet. 

4. Oracles: They provide smart contracts with off-chain data, such as asset prices. To ensure accuracy and security, several measures are used. These measures help filter out incorrect data, though legitimate transactions may sometimes fail during high volatility or with outdated feeds to protect against risks.