Binance Labs Invests in Solayer: Is This the Next Big Thing in Solana?

Binance Labs Invests in Solayer, Boosting Solana’s Ecosystem

In a strategic move that highlights its commitment to nurturing the cryptocurrency ecosystem, Binance Labs, the venture capital and incubation arm of Binance, has invested in Solayer, a leading restaking network built natively on Solana.

This investment is part of Binance Labs’ broader strategy to back innovative projects that are redefining the staking landscape across various blockchain networks.

Solayer, having quickly risen to prominence within the Solana ecosystem, is poised to leverage this capital infusion to expand its team, onboard new protocols, and deepen its research into solving some of Solana’s most pressing network challenges, particularly concerning congestion and throughput.

Last Friday, with a huge boost from Binance Labs, it skyrocketed to the top of Rootdata’s 24H Hot Project list, sparking immense excitement and buzz in the industry

What is Solayer?

Solayer is not just another protocol in the Solana ecosystem; it represents a significant advancement in how decentralised applications (dApps) can achieve security and network efficiency.

Built on the robust infrastructure of Solana, Solayer harnesses the economic principles of proof-of-stake (PoS) to extend Solana’s base layer security to a broader range of decentralised systems and applications.

This network allows users to participate in a decentralised validator network, where they can stake their assets to decentralise Solana, earn native yields through Miner Extractable Value (MEV) boosts, and gain additional yields from delegated Actively Validated Services (AVS).

Solayer's architecture is designed to empower dApps on Solana by ensuring they have improved access to network bandwidth and security.

Traditionally, smaller dApps on Solana were vulnerable due to their reliance on a limited number of validators, making them potential targets for attacks.

Solayer changes this dynamic by enabling users to restake their assets across multiple validators, thereby increasing the security and liveliness of the entire Solana ecosystem.

This restaking mechanism not only bolsters the security of dApps but also incentivizes validators, making Solana’s network more attractive for those willing to invest in advanced hardware to compete for rewards.

The Unique Proposition of Solayer

What sets Solayer apart from other protocols is its innovative approach to utilising Solana’s proof-of-stake security to benefit the broader ecosystem.

Unlike traditional staking models, where assets are locked into a single network or application, Solayer’s restaking mechanism allows users to lock their staked assets into various actively validated services.

This approach maximises the security and economic efficiency of the Solana network while providing users with multiple streams of income.

The platform's success is reflected in its rapid adoption.

Within just 60 days of launching Phase 1, Solayer has amassed over $150 million in Total Value Locked (TVL), making it the 13th largest protocol on Solana, according to DeFiLlama.

The platform has also attracted more than 80,000 unique deposit addresses, underscoring its appeal to a broad user base.

The ability to restake assets across a decentralised validator network ensures that dApps on Solana can secure block space and prioritise transaction inclusion, which is critical for their operation and growth.

How Solayer Works

At the core of Solayer’s functionality is its restaking architecture, which includes several key components: the Restaking Pool Manager, the Delegation Manager, and the Stake Pool.

The Restaking Pool Manager is responsible for overseeing the flow of assets and their conversion into Solayer-specific tokens, such as sSOL.

Restaking Implementation

The Delegation Manager handles the distribution of stakes across validators and actively validated services, ensuring that the assets are effectively utilised within the network.

Meanwhile, the Stake Pool manages the selection of validators and the distribution of MEV-boosted returns, which are critical for maximising the rewards for stakers.

Native SOL restaking

Solayer's architecture also supports a Shared Validator Network (SVN), which facilitates cross-chain interoperability by allowing Solana-based chains to share security.

This shared security model optimises the allocation of network resources based on the stake committed by validators or stakers.

The result is a more efficient and secure network that can support the high-performance demands of Solana’s ecosystem.

Meet the Founders of Solayer

According to its Linkedin, Solayer’s team is comprised of fewer than 10 members, led by two co-founders.

Jason Li, the co-founder, brings a strong entrepreneurial background to Solayer.

He is the co-founder of MPCVault, which focuses on non-custodial multisig wallets, and has previously founded LoopChat and InkyLabs, with the latter being sold for over $1 million.

Notably, Jason has never held a traditional employment role, further highlighting his entrepreneurial spirit.

His Socials: X | Linkedin

Rachel Chu is the other co-founder of Solayer and the founder and CEO of the NFT platform Vibe.

She was previously a core developer at Sushiswap.

Despite her low public profile, her significant presence in the crypto space is evident from the notable figures and institutions following her on X, including Coinbase, Paradigm, and a16z.

Her Social: X

Solayer's Builder Round Success Propels TVL to New Heights

On 1 July 2024, Solayer, a prominent staking protocol within the Solana ecosystem, announced the successful completion of its Builder Round financing.

The specific amount raised has not been disclosed.

The financing round saw participation from notable figures in the crypto space, including Anatoly Yakovenko, co-founder of Solana Labs; Michael Repetny, a core contributor at Marinade; Rooter, founder of Solend; Richard Wu, co-founder of Tensor; crypto influencer Ansem; and Sandeep Nailwal, co-founder of Polygon.

Following this successful financing round, Solayer reported a notable achievement with its Total Value Locked (TVL) surpassing $100 million.

The involvement of such high-profile investors highlights the growing confidence in Solayer's potential to enhance the Solana ecosystem.

As of now, Solayer’s TVL marked an impressive $50 million increase in just one month.

The completion of the builder round and the subsequent increase in TVL signify robust support and optimism surrounding Solayer, setting a strong foundation for future growth and development in the Solana blockchain environment.

What is sSOL?

One of the standout features of Solayer is its native token, sSOL (Solayer-SOL), which plays a crucial role in the platform's restaking mechanism.

sSOL is a liquid token that unlocks a range of decentralised finance (DeFi) use cases, including liquidity provisioning, collateralisation, and spot trading.

The process of acquiring sSOL begins with users restaking their native SOL tokens.

These staked SOL are first converted into an intermediary form called sSOL-raw, which is the liquid staking token issued by the stake pool manager.

After further interaction with the Solayer restaking pool manager, sSOL-raw is then converted into sSOL, which can be used within the Solayer ecosystem.

The ability to restake a variety of tokens is another unique aspect of Solayer.

Currently, the platform supports the restaking of several tokens, including SOL, mSOL (Marinade Staked SOL), INF (Infinity), JitoSOL, bSOL (BlazeStake Staked SOL), and hubSOL.

This versatility allows users to diversify their staking strategies and maximise their returns across different assets.

Here’s a guide to join the airdrop:

Maximising User Benefits Through Delegation on Solayer

Delegation on Solayer offers users several benefits that go beyond traditional staking rewards.

By participating in the restaking process, users can earn native yields through MEV-boosts as well as additional annual percentage yields (APYs) from delegates.

Delegates in the Solayer ecosystem are endogenous Actively Validated Services, essentially dApps built on Solana that can receive delegations of sSOL to secure network bandwidth and transaction throughput.

Moreover, Solayer’s delegation process is designed to ensure that users are supporting their favourite Solana dApps while also securing the network.

The more stake that is allocated for a dApp’s Remote Procedure Call (RPC), the higher the quality of service it will receive.

This stake-weighted quality of service (swQoS) mechanism is crucial for dApps that require reliable access to network resources, such as block space and transaction processing.

By delegating their assets on Solayer, users are not only securing the network but also contributing to the overall performance and reliability of the Solana ecosystem.

sSOL Fully Transferable and New Liquidity Vaults Launched

Starting last week, sSOL, the liquid staking token from Solayer, is now fully transferable and unfrozen.

This advancement enables users to deploy sSOL, earned from staking SOL with Solayer, across various decentralised finance (DeFi) projects on Solana.

The first protocol to support sSOL is Orca, where users can now add liquidity to the sSOL/SOL trading pair. For those interested, liquidity provision can be done here: Orca Liquidity Pools.

Additionally, Solayer has partnered with Kamino Finance to introduce the sSOL-SOL Liquidity Vault.

This new vault allows sSOL holders to deposit their tokens and earn a share of trading fees from Orca, as well as the underlying staking yield of sSOL.

For the first month, up to $10,000 worth of SOL is being offered, with a cap of $1 million.

Kamino’s liquidity vaults facilitate earning yield by providing liquidity to concentrated liquidity market makers (CLMMs).

Users can now benefit from increased yield while maintaining exposure to sSOL.

To obtain sSOL, visit the Solayer dApp to convert SOL or supported Solana LSTs into sSOL, or purchase and trade sSOL-SOL pairs on Raydium and Orca.

Protecting Solayer Staking Pools and Users

Security is a paramount concern in the Solana ecosystem, and Solayer has implemented several measures to ensure the protection of its staking pools and users.

The ownership of the Solayer contract is shared with a multisig wallet, requiring at least three out of five key holders to confirm any protocol-code upgrades.

Below are the first 3 community seat holders, out of 5 in total.
Joseph Lallouz (Bison Trail)
Michael Repetny (Marinade Finance)
Robert Chen (Osec)
Solayer Core Team (2 keys)

This multisig approach involves both the core team and community seat holders, ensuring a decentralised governance structure.

Additionally, Solayer undergoes regular security audits conducted by Ottersec, with plans for two audits per year on all existing contracts.

View the full audit documents: https://docs.solayer.org/security/audits

This rigorous auditing process is complemented by a community-driven approach, where technical hackers and researchers are encouraged to review the contracts and report any bugs or vulnerabilities.

This proactive approach to security helps maintain the integrity of the Solayer platform and protects the assets of its users.

Is Solayer the Next Big Disruptor or a Flash in the Pan?

From Coinlive's perspective, Solayer’s meteoric rise, backed by significant investments and strategic partnerships, positions it as a potential game-changer within the Solana ecosystem.

However, its success will hinge not just on the strength of its partnerships but on its ability to sustain momentum amid increasing competition and evolving market dynamics.

The project's innovative restaking model and security measures are impressive, yet they must continuously adapt to maintain relevance.

Will Solayer's bold moves secure its place as a pivotal player in the DeFi space, or will it face challenges that overshadow its potential?

The market's rapid evolution could either cement its role as a leading force or expose its vulnerabilities in an ever-competitive landscape.