What is mSOL?
mSOL represents your staked SOL in the Marinade stake pool. Here's what that means and how it unlocks your liquidity.
Last updated
mSOL represents your staked SOL in the Marinade stake pool. Here's what that means and how it unlocks your liquidity.
Last updated
mSOL is a liquid staking token that you receive when you stake SOL on the Marinade protocol. These mSOL tokens represent your staked SOL tokens in Marinade's stake pool.
They act as a receipt, allowing you to exchange them later on for your staked SOL and the earned rewards. Meanwhile, you can use mSOL in DeFi while the token's price accrues in value vs. the price of your SOL.
mSOL is a rewards-accruing liquid staking token. This means that after each Solana epoch (2-3 days), its value is recalculated based on the staking rewards earned by the Marinade Stake Pool. The price of mSOL is calculated as follows:
Price of mSOL = total_staked / tokens_minted
As the protocol cannot mint new mSOL without SOL being exchanged for them, only the total staked amount is going up (for any new mSOL minted, the same amount of SOL, at the current price of mSOL, has to be staked and also joins the total staked amount).
This means that the price of mSOL is going up each epoch relative to SOL as long as staking rewards are distributed for the SOL staked in the protocol. If you keep mSOL for a year, its value against SOL will have gained 7-8% (Marinade's APY at the time of writing).
When you choose 'Deposit stake account', these operations happen under the hood:
Marinade finds the delegated-active-credit-observed stake accounts, delegated to any validator.
Marinade takes control of the delegated and fully active stake account by becoming staking and withdrawing authority.
Marinade takes this amount and accordingly increases the amount of stake orders falling under:
current epoch (epoch_stake_orders)
total staked (total_stake_orders)
Marinade mints mSOL for the user according to the mSOL/SOL ratio.
When you choose 'Delayed unstake', these operations happen under the hood:
You are given a claim ticket (that will be a NFT issued on the blockchain) indicating the amount and due time of your unstake.
mSOL is burnt and removed from the supply.
The unstake operation is launched and performed by the bot.
In due time, you will be able to claim your SOL and destroy the claim ticket in exchange. (A claim ticket has no expiry date.)
This mechanism is required to perform larger unstake operations, when the amount is bigger than the current balance of the liquidity pool or if you do not mind waiting for the unstaking period.
Example of Delayed unstake at Epoch N:
Here are the three situations that can happen when you use ‘Delayed unstake’ during epoch N.
You start unstaking during Z, which is the beginning of epoch n (a few minutes into epoch n).
You will receive your SOL at the beginning of epoch n+1. The amount of SOL you receive is computed as SOL = [mSOL to burn]*[mSOL price] when the unstaking starts, but the mSOL price may not be updated as the Marinade bot needs to be run to update the price at the beginning of each epoch. We suggest waiting a few hours into the epoch before using 'Delayed unstake' and starting it before the last 4 hours of the epoch.
You start unstaking during A.
You will receive SOL at the beginning of epoch n+1. The amount computed is [mSOL to burn]*[mSOL price] when the unstaking starts.
You start unstaking during B, the last 4 hours of epoch n.
You will receive SOL at the beginning of epoch n+2. The amount computed is [mSOL to burn]*[mSOL price] when the unstaking starts.
No. You will realize your SOL staking rewards when you unstake mSOL for SOL, but the value of your mSOL is continually growing. If you choose delayed unstake, you must return to the Marinade DApp to claim your SOL. You can sign up for Dialect alerts by clicking on the bell icon next to your wallet in the Marinade DApp to be notified when your stake is ready to be claimed via email, telegram, SMS, or wallet. If you choose instant unstake, your SOL plus SOL staking rewards minus the unstake fee will be sent to your wallet.
As long as the Marinade protocol earns staking rewards and you hold mSOL, your SOL stake is growing. So how does Marinade ensure that the protocol is safe?
Marinade has undergone a series of audits to ensure the code cannot be exploited. Many of the elements of Marinade are open source, and the mSOL smart contract is under the control of a 13-party community multisig that requires six signers to make a change. Smart contract risks always exist in DeFi, but mSOL's tokenomics and the Marinade protocol are designed with security first and foremost. You can learn more about this on this page:
mSOL tokens already have dozens of use cases in our growing ecosystem. They allow you to access DeFi protocols while enjoying your staking rewards and helping the network. To help you get started, here is a non-exhaustive list of DeFi options where you can use mSOL:
Borrowing/Lending - mSOL can be used as collateral or borrowed on multiple platforms.
Liquidity provision - You will find many liquidity pools using mSOL in DeFi. They can be divided into two categories:
mSOL/SOL pools - These pools are a way to use your mSOL in DeFi while avoiding impermanent loss.
mSOL/XXX pools - These pools will be subject to impermanent loss but will allow you to provide liquidity on a large number of pairs.
Single-asset staking - It is possible to stake your mSOL to earn MNDE, Marinade's governance token. This is only possible on Marinade.
Trade on DEXs - mSOL is available on most decentralized exchanges and can be traded for other crypto tokens. Remember, by trading your mSOL, you also trade your accumulated staking rewards.
Trade on CEXs - mSOL is also available to trade on centralized exchanges such as Coinbase, Kraken, or Gate. You can move the mSOL to your crypto wallet from these exchanges and fully utilize it in Solana DeFi.
Liquid staking tokens like mSOL could theoretically replace SOL throughout the Solana DeFi ecosystem. Any protocol currently using SOL could integrate mSOL using Marinade's permissionless SDK. By doing so, the network would become more secure and decentralized and our users would all earn their staking rewards while enjoying DeFi as they currently do.
If you still have questions or want to get involved in our community, join Discord and meet us in the kitchen!
