introducing cgntSOL
For the next daily spotlight of Sanctum’s new generation of LSTs, we’ll be having Cogent Crypto’s cgntSOL!
What’s Cogent Crypto?
Cogent Crypto is a high-performing and reputable validator that has supported Solana since the early days. Cogent Crypto’s mission is and always has been about convincing, educating, and onboarding the next billion users into the world of permission-less and trust minimized economic systems we collectively call crypto. They believe high performance blockchains are the way forward and continued investment and reinvestment into these systems by the community members and stakeholders is the fastest path to get there.
As a valued member of the Solana ecosystem, Cogent has built various tools that provide essential value to the staking ecosystem. These include various calculators - a validator profit calculator, a lending APY calculator, an MNDE gauge profit calculator and an impermanent loss calculator - as well as various guides on starting a validator and staking.
Cogent has also never been afraid to forge a bold path in the staking ecosystem. They were the second validator to set up an LST with the help of Sanctum. They are also the first validator to uniquely experiment with NFTs to share value with their stakers through their Cogent Cogs that are available on Tensor. Representing 0.01% ownership of the Cogent Crypto validator earnings, the Cogent Cogs are a brilliant way Cogent distribute revenue with their users. Read more here! Cogent charges a 5% commission fee on their validator, and have an estimated APY of 7.18% as of time of writing.
Why cgntSOL?
The shortest answer to “Why cgntSOL?” is composability. Having a tokenized representation of stake accounts enables stake accounts to be used by any program that operates on tokens. These include the DeFi ecosystem, payments, NFT tooling as well as dev tools.
With tokenized stake accounts, e.g. cgntSOL, you can use almost any Solana program while holding onto an asset that is increasing value relative to SOL. That alone can be quite compelling but net new use cases utilizing the composability of tokens will bring even more compelling possibilities in the future.
Now to answer “Why would I want to hold cgntSOL?”
First and foremost, staking to the Cogent Crypto validator brings some of the highest returns from our extremely high APY, our very low MEV commission (6%), But more specifically, why one might want to hold cgntSOL over just native staking with Cogent depends on your current usage of Solana. Do you mostly just stake SOL and hold for the long term, or stake SOL but also heavily use the broader SOL ecosystem?
If you fall under the “I mostly just stake SOL and hold for the long term” there are two solid reasons why it might make sense to hold cngtSOL
1) You have easy access to instant liquidity for any amount of cgntSOL you hold. When you need a specific amount, you can exchange the amount of SOL you need while keeping the rest of your tokenized stake. For Example: You need 5 SOL to pay for an NFT you’d like to purchase but you have all of your SOL staked.
Stake Accounts: To get the 5 SOL needed for the NFT you’d deactivate one of your stake accounts with at least 5 SOL, wait until the epoch ends, withdraw the SOL, create a new stake account with 5 less SOL, wait for the next epoch to end until the rest of the stake begins receiving rewards again.
VS
cgntSOL: To get the 5 SOL needed for the NFT you’d navigate to jup.ag, swap some cgntSOL for 5 SOL. The remainder of your cgntSOL will continue to earn rewards.
2) cgntSOL will automatically collect and compound MEV rewards by increasing in value relative to SOL when the underlying stakepool automatically collects and stakes MEV rewards. read more
Currently if you have a native stake account you will have to manually collect MEV rewards and make a new stake account with the MEV rewards to compound your earnings.
If you fall under the “I stake SOL but I also heavily use the broader SOL Ecosystem” category.
Then you are hopefully comfortable with DeFi and understand the additional risks and you will be able to utilize cgntSOL to potentially earn rewards above and beyond the staking rewards from just holding cngtSOL
Borrow USDC against your cgntSOL on lending platforms while your cgntSOL increases in value
Supply liquidity across cgntSOL pairs and gain trading fees while your cgntSOL increases in value
Utilize cgntSOL to arbitrage across unbalanced pools while your cgntSOL increase in value
You’ll be able to deposit cgntSOL into INF to earn additional trading returns + use it in DeFi once it’s live
How to stake with cgntSOL?
If you are an existing staker with Cogent Crypto, you can now convert your existing stake account via https://app.sanctum.so! If you wish to deposit SOL, just do so by swapping SOL to cgntSOL on jup.ag or on https://app.sanctum.so. It’s that easy!
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