Last week, we unfroze and made sSOL liquid. Today, we are excited to announce Kamino as our new partner and the launch of our first liquidity vault on Kamino Finance. This marks an exciting expansion of sSOL’s utility, allowing holders to deposit their tokens into the sSOL-SOL Liquidity Vault to earn both sSOL’s underlying staking yield and trading fees from Orca.

In addition, for the first month we will be offering $10,000 worth of SOL up to a cap of $1M.

Deposit sSOL & Start Earning

Understanding Liquidity Vaults on Kamino

Liquidity vaults on Kamino are an automated liquidity solution that allow users to earn yield on their crypto assets by providing liquidity to concentrated liquidity market makers, also known as CLMMs.

In this case, the vault deploys liquidity into the sSOL-SOL DEX pool on Orca, playing a crucial role in ensuring deep liquidity for sSOL. When you deposit sSOL into the vault, you will continue to earn the native yield of sSOL while also earning fees from trading volume.

How It Works

A user currently holding 10 sSOL is earning an APY of approximately 8.12% derived from Solana’s native staking yield. The user now wants to earn additional yield while maintaining exposure to sSOL, and thus decides to deposit their tokens into the sSOL-SOL Liquidity Vault on Kamino.

The user’s earnings now looks as follows:

As demonstrated, the liquidity vault allows for greater utilisation and passive yield, all the while maintaining exposure to sSOL.

Obtaining sSOL

The easiest way to obtain sSOL is by visiting the Solayer dApp and converting SOL or any of the supported Solana LST’s into sSOL. Alternatively, sSOL-SOL can also be traded and purchased on Raydium and Orca.

We will also list these pairs on our DeFi page for easy access.

What Is sSOL?

sSOL is the universal liquidity layer for dApps and liquid restaking tokens on Solayer. Solayer creates a marketplace for holders to delegate their staked tokens towards dApps to help secure network bandwidth and TPS, and in return receive additional rewards.

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.

You can learn more about Solayer by visiting our docs page.

Next Steps

With Orca and Kamino incentives now live, stay tuned as we prepare to announce our next whitelisted protocol, offering sSOL holders more ways to earn boosted incentives. Be sure to follow us on X and join our Discord to stay up to date with all the latest announcements.

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.

• Why did we only choose these protocols?

  We have chosen Kamino, and Orca as our launch partners to bootstrap and concentrate initial liquidity for sSOL. We look for security, reliability, and ecosystem synergy in partners to provide the maximum value for sSOL holders.

As we progress, we will gradually expand these integrations to include other DeFi protocols, enhancing the utility and reach of sSOL.

Are there any accounting system updates?

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

Warning: The creation of pools/vaults is permissionless in various DeFi protocols. However, Solayer currently only accounts for participants in Orca, and Kamino, 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 (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.