Phase 0: Build the Foundation

First, we built the foundational infrastructure for all LSTs to be interoperable, used throughout DeFi, and traded in size without slippage.

We built (now The Reserve). It is a pool of liquid SOL that is able to service instant unstake for all LSTs. Thus, no matter how big or small an LST is, it will be able to be instant unstaked into SOL right away. This is the backstop of Solana DeFi: DeFi protocols are able to integrate LSTs as collateral because they have a large emergency pool of SOL always available to service instant unstakes.

We built the Sanctum Router. This is a router we built that was integrated in Jupiter that is the single most important piece of infrastructure for LSTs. It allows people to convert one LST to another even when there is normally no route between two LSTs. This unifies LST liquidity by allowing small LSTs to access the liquidity of much larger LSTs.

Previously if you had e.g. scnSOL, you could only get SOL back via scnSOL - SOL LPs. And when the liquidity there runs out, the price craters. But with the Sanctum Router, scnSOL can go through not just scnSOL-SOL LPs, but every other LST's LPs: scnSOL -> jitoSOL -> SOL, scnSOL -> mSOL -> SOL, etc.

The mSOL depeg on December 12th, 2023 showed that even large stake pools on Solana can temporarily depeg when faced with large selling pressure. And it depegged because the Marinade stake pool (at the time) wasn't yet integrated with Sanctum Router – otherwise, they would have been able to draw from the Sanctum Reserve or even tap into liquidity from other LSTs.

Router and Reserve have collectively serviced over $460M worth of volume on Jupiter alone and dispensed over 1.8m of SOL in instant unstakes.

Phase 1: Start the LST Revolution

Before Sanctum, it would be impossible to have thousands of different LSTs. The total liquidity would be fractured across all of these LSTs and depth would be laughably small.

But this unified liquidity layer changes things. There can be thousands, millions of LSTs. Each of them can access the full depth of unified liquidity with Sanctum Router and Sanctum Reserve – without having to put up any liquidity of their own.

So the next step: to launch these LSTs.

We've launched with a pioneer batch of six new validator LSTs: bonkSOL, compassSOL, dSOL, jucySOL, pwrSOL, and superSOL. These validator LSTs have zero deposit stake fee, zero withdrawal fee, and zero management fee. They therefore represent a strict upgrade over native staking.

These projects are all highly motivated and are excitedly trying different things with their LSTs, and we think that this will kickstart a Cambrian explosion of new LSTs on Solana. The goal is to migrate existing native stakers to validator LSTs, and to get SOL holders to hold LSTs instead.

The launch has been a good way to improve our infra so we can scale to run thousands of different LSTs. The initial response has been very promising, with many more projects requesting to be onboarded.

And Sanctum has delivered on its liquidity promise. Here's an example of a brand new LST (bonkSOL) with no native liquidity. Despite that, it supports large 1,000 bonkSOL β†’ USDC and bonkSOL β†’ SOL swaps thanks to Router and Reserve.

We have built a world where anyone can have their own LST, not just validators. Here are more exciting use cases for LSTs; some already here, some purely hypothetical (for now). Note that the hypothetical ones are purely our ideas and they do not necessarily have the teams' approval.

laineSOL: Laine is one of the best validators in the space, and many people want to support him. Before Sanctum, they would have to give up on the liquidity and UX benefits of liquid staking to do so. Now thanks to Sanctum's unified liquidity layer, there is no tradeoff: anyone can stake in laineSOL and enjoy the benefits of LSTs. Laine also uses laineSOL as a way to distribute block rewards to stakers. laineSOL holders enjoy extra block rewards, resulting in a net APY of ~20% – more than twice native staking yields.

pathSOL: Fed up with the many rug NFT projects, Pathfinders decided to run an "unruggable mint". Unlike most other NFTs, these ones come with a money-back-guarantee. You pay 10 SOL to mint a Pathfinder – but if you ever change your mind, you can burn the Pathfinder and get your SOL back. The SOL is staked into pathSOL and does not give staking returns to its stakers; instead, staking yields are given to the team to support the development of the Pathfinders universe. This incentivises building in public, maintains a floor price, and ensures that the team continues to deliver on their roadmap.

tensorSOL: Tensor is the largest Solana NFT marketplace. There is a lot of SOL sitting around in unfilled orders. By allowing people to place bids with tensorSOL instead of SOL, Tensor earns yield on open orders. Tensor gives extra points to tensorSOL users, and runs a jackpot of sorts: every time someone pays in tensorSOL, they have a chance to win part of the accumulated staking rewards.

waifuSOL: Raiba AI is building Mika, the first Solana AI waifu. They accept credit card subscriptions, but also waifuSOL: you automatically get access to Mika for as long as you hold 50 waifuSOL. Membership is tiered: waifuSOL whales get early access to preview builds of Mika and new waifus.

These stories – and many like it – make up the infinite-LST promise. Sanctum's promise is to empower all these usecases and kickstart a Cambrian explosion of new LSTs.

Phase 2: Infinity

Next, we’ve launched Infinity. Infinity is a multi-LST LP that supports swaps between all LSTs in the pool. Most pools support only two assets (e.g. jitoSOL-bSOL); we support thousands. This allows our pool to be much more capital-efficient than normal pools. In fact, we believe it's the most capital-efficient LST AMM design possible; the optimal liquidity solution for an infinite-LST future.

How does it work? The key insight is that there is an infallible on-chain oracle that tells us the floor price of every LST. The price of every LST can simply be read off the account itself. This lets Infinity support swaps between any two LSTs of any size without having to rely on any constant-product or stableswap invariant.

Users can join Infinity by depositing any (whitelisted) LST into Infinity. In return, they will receive the INF token, which accrues both staking rewards and trading fees from the pool. Of course, all the LSTs that we launch in phase 1 will be eligible to enter Infinity.

INF is itself an LST and so can be directly composed upon 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 plan to make INF one of the most liquid LSTs on Solana, to further deepen liquidity available to LSTs.

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