Introducing Infinity: Enabling The Infinite-LST Future
Sanctum’s mission is to make all SOL liquid. We make it possible for people to launch, maintain, and trade millions of liquid staking tokens (LSTs). We have powered over 75M USD in LST-SOL swaps and over 1M SOL of instant unstakes, and have integrated with Jupiter and Solflare so liquid staking and unstaking are just one click away.
We already support every LST on Solana today, and we want to do more for the LST ecosystem. Today, we’re announcing Sanctum Infinity, a multi-LST liquidity pool that’s only possible on Solana.
LSTs need deep liquidity
For LSTs to be truly liquid, they need a source of deep liquidity. The mSOL depeg on December 12th, 2023 showed that even large stake pools on Solana can temporarily depeg when faced with large selling pressure.
This problem will continue to grow. There are over 10 LSTs on Solana today, but this will increase to hundreds with the imminent arrival of single-validator LSTs.
Why validator LSTs? Solana has so many stake accounts that the network comes to a halt temporarily at the start of every epoch to calculate staking rewards for each stake account. Validator LSTs greatly decrease the number of stake accounts and make Solana faster. In addition, validator LSTs are fully transferrable and composable SPL tokens, allowing them to be used in all of DeFi.
For these LSTs to reach their full potential, however, they must be able to be instantly unstaked for SOL and to be easily swapped for other LSTs. But it is difficult to ensure this for hundreds of new LSTs. Existing solutions support a single asset pair per market (e.g. bSOL/scnSOL, mSOL/jitoSOL, laineSOL/cgntSOL). Each new LST requires a new market and fresh liquidity. The number of markets needed to service all possible pairs in a single swap grows with the square of the number of LSTs. This fragments liquidity and is a huge barrier to entry.
Sanctum has therefore developed a scalable solution that can help all LSTs access deep liquidity and be interoperable with one another.
Sanctum Infinity: A liquidity pool that supports millions of LSTs
Sanctum Infinity is a multi-LST liquidity pool that allows swaps between all LSTs in the pool. Users can become liquidity providers (LPs) by depositing any (whitelisted) LST into the Infinity Pool. In return, they will receive the INF token, which accrues both staking rewards and trading fees from the pool.
Infinity is the only liquidity pool able to support millions of different LSTs natively. Because all LSTs can be converted into a stake account, it is possible to calculate a fair price for every LST by looking at the SOL contained in the stake account. This lets Infinity support swaps between any two LSTs of any size without having to rely on any constant-product or stableswap invariant.
Infinity will have a target allocation of each LST that aims to maximise trading returns while providing a minimum for each LST. The pool maintains its target allocation by dynamically adjusting swap fees for each LST.
INF is itself an SPL liquid staking token and so can be directly used by DeFi protocols. All LSTs will be able to share the liquidity of INF-USDC and INF-SOL, or route via INF to access the liquidity from any other LST pair.
We believe the Infinity pool will mark a sea change in liquid staking. With Infinity all LSTs—large or small—can share a deep pool of liquidity and be used without restriction in all of DeFi. We are excited to work towards a brighter, more liquid future on Solana.
Infinity is currently under audit and will be available in Q1 2024.
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