Liquid Staking on Solana: LSTs, Leverage Looping and the Risks

Solana liquid staking lets users earn staking yields while keeping liquidity through LSTs such as JitoSOL and mSOL, but leverage looping amplifies both returns and risks.

What Liquid Staking Tokens Deliver on Solana

Liquid staking tokens on Solana let users stake SOL and receive a tradeable token that represents both the principal and accrued rewards. These LSTs remain usable across DeFi protocols while the underlying SOL continues to earn native staking yields.

Major issuers include Jito with JitoSOL, Marinade with mSOL, Sanctum as an aggregator supporting validator- and app-branded LSTs such as INF, Jupiter with JupSOL, and Binance with BNSOL. Additional protocols such as Drift and BlazeStake also issue LSTs.

DefiLlama data as of September 2026 shows total Solana LST TVL at $5.929 billion, led by Sanctum Validator LSTs at $1.545 billion, Binance Staked SOL at $1.005 billion, and Jito Liquid Staking at $1.003 billion. Network staking stood at roughly 62.35 percent of circulating supply, or about 363.7 million SOL, on 15 September 2026. Liquid staking accounted for an estimated 13.2 percent of that total stake according to mid-2026 Messari figures. This structure gives holders liquidity without forcing them to unstake, enabling composability in lending markets and automated strategies.

Leading LST Protocols and TVL Breakdown

As of September 2026, Solana liquid staking protocols hold a combined $5.929 billion in TVL according to DefiLlama data. Sanctum leads with $1.545 billion across its validator LSTs, followed closely by Binance Staked SOL at $1.005 billion and Jito Liquid Staking at $1.003 billion. Jupiter Staked SOL sits at $502.63 million, Drift Staked SOL at $273.64 million, and Marinade Liquid Staking at $226.87 million.

Sanctum’s growth to $1.77 billion in SOL terms by early September reflects its factory model supporting exchange- and app-branded tokens. JitoSOL’s tokenized value of $1.0 billion at $126.40 per token shows strong liquidity despite share erosion. BNSOL trades at $109.76 with near-parity tokenized value, while mSOL and JupSOL maintain premiums at $136.42 and $117.25 respectively. These figures highlight how protocol design, MEV capture, and DeFi composability shape current TVL rankings.

How Leverage Looping Works Step by Step

Leverage looping on Solana amplifies exposure to liquid staking yields by repeatedly using an LST as collateral to borrow more SOL, then converting that borrow back into the same LST. The process relies on lending platforms such as Kamino or Marginfi, where oracle prices determine the maximum loan-to-value ratio and trigger liquidations if collateral value falls.

1. Deposit an LST such as JitoSOL or mSOL into the lending protocol as collateral. The oracle price feed instantly sets the borrowing power available.
2. Borrow SOL or a stablecoin up to the allowed LTV limit. The protocol records the debt at the current oracle valuation.
3. Swap the borrowed tokens for more of the original LST on a DEX. The new LST tokens are deposited again as additional collateral.
4. Repeat the deposit-borrow-swap cycle to increase the overall position size and staking reward exposure while the oracle continues to mark collateral and debt values.

Each cycle raises both potential yield and liquidation risk because oracle price deviations or rapid LST depegs can push the position below the maintenance threshold. The sequence stops when the user reaches a chosen leverage multiple or when borrow rates make further loops unprofitable.

Current Yields and Protocol Revenue

Mid-2026 data from StakePoint placed native Solana staking APYs in the 5.7–7.0% range. LST yields tracked closely, with JitoSOL near 5.6% and broader LSTs between 5.5% and 7.0%. Compression occurred as on-chain activity and MEV declined, narrowing the spread between native and liquid options.

DefiLlama’s latest seven-day figures show Solana LST protocols collecting $5.08 million in fees and $232.7 thousand in revenue. The modest revenue capture relative to fees reflects the competitive structure of liquid staking, where most staking rewards flow to token holders while protocols retain only a small cut to cover operations and incentives.

These numbers indicate that LST revenue remains tightly linked to overall network usage and validator performance rather than high protocol margins.

Risks of Leveraged LST Positions

Leveraged LST strategies on Solana magnify exposure to several distinct failure modes that interact rapidly in looped positions. A depeg between an LST and SOL immediately reduces collateral value on platforms such as Kamino or Marginfi, pushing loan-to-value ratios past liquidation thresholds and triggering automated sales of the LST collateral.

Price volatility in SOL itself accelerates the same process because each loop multiplies the notional size that must be closed during a downturn. Borrow-rate spikes, which occur when utilization climbs, raise interest costs and further compress health factors, often forcing deleveraging exactly when liquidity is thinnest.

Oracle failures can delay or distort price updates, allowing positions to drift deeper underwater before liquidation bots react. Smart-contract exploits add a separate layer: a vulnerability in any one of the lending, swapping, or staking contracts used in a loop can drain funds across the entire chain of transactions.

Liquidity mismatches compound every other risk. During stress, DEX depth for the LST may evaporate, so even a modest liquidation order produces additional slippage that cascades through other looped positions. Native staking risks such as slashing remain present and are amplified by the higher effective exposure created through repeated leverage cycles.

FAQ

What share of Solana staking is liquid?

Liquid staking tokens represent a minority but growing share of staked SOL, with the overall network staking ratio at 62.35 percent of circulating supply as of 15 September 2026.

Which protocol holds the largest LST TVL?

Sanctum Validator LSTs lead with $1.545 billion, followed by Binance Staked SOL at $1.005 billion and Jito at $1.003 billion according to DefiLlama data.

What APYs do Solana LSTs currently offer?

Native staking yields range from 5.7 to 7.0 percent, while LSTs such as JitoSOL have delivered around 5.6 percent with other protocols between 5.5 and 7.0 percent as of mid-2026.

How has Sanctum expanded?

Sanctum reached $1.77 billion in SOL terms by early September 2026, reflecting 150 percent growth since early 2025 through its liquidity-sharing factory model supporting over 200 LSTs.

What depeg risks affect leveraged LST positions?

Even temporary depegs can amplify losses in looped strategies because borrowed SOL or stablecoins must be repaid while collateral value drops, layering smart-contract risk on top of native staking and slashing exposure.

Where can readers verify current LST metrics?

DefiLlama, Solana Compass, and Dune Analytics provide the TVL breakdowns, token values, and staking ratios cited throughout this article as of September 2026.