As the market recovers, with Bitcoin surpassing $62,000 and many cryptocurrencies rebounding, the Sol/ETH exchange rate has hit a record high. This resurgence has reignited discussions about Solana's potential to challenge Ethereum's dominance. Ethereum's restaking protocols have grown rapidly since last year, attracting significant investment from both individuals and institutions. Now, with capital flowing into the Solana ecosystem, Solayer—a prominent restaking project on Solana—is poised to become a major focus for large-scale investments.
This article provides a quick overview of Solayer, an emerging restaking project on Solana that recently secured investment from Binance Labs.
What Is Solayer?
Solayer is a rising star in Solana's restaking space. On July 2, the project announced the completion of its builder round funding, backed by a strong lineup of investors. These include Anatoly Yakovenko, co-founder of Solana Labs; Rooter, founder of Solend; Richard Wu, co-founder of Tensor; and Sandeep Nailwal, co-founder of Polygon. On August 7, Solayer also received investment from Binance Labs.
He Yi, co-founder of Binance and head of Binance Labs, commented: "Solayer has already made a notable impact within the Solana ecosystem. We are excited to collaborate with them to enhance ecosystem vitality."
As of August 9, the platform has attracted over 80,000 unique deposit addresses, with a total value locked (TVL) exceeding $160 million, making it the largest restaking protocol in the Solana ecosystem.
With the new funding, Solayer plans to expand its team, integrate new protocols, and establish itself as a core component of Solana. The team will also focus on researching solutions that leverage restaking infrastructure to address Solana's network congestion issues. Additionally, Solayer aims to launch its second-phase product, allowing stakers to use SOL to secure both Solana and dApps while ensuring network bandwidth and transaction throughput.
Founding Team
According to Rootdata, Solayer has two core founders: Rachel Chu and Jason Li.
Rachel Chu is the co-founder of Solayer and the founder and CEO of Vibe. Previously, she was a core developer at Sushiswap.
Jason Li is the co-founder of Solayer and MPCVault. He holds a Bachelor's degree in Computer Science from the University of California, Berkeley.
How Solayer's Restaking Works
Solayer is a restaking protocol within the Solana ecosystem that enhances network bandwidth to support on-chain dApps. It utilizes staking economic principles to extend the security of Solana's base layer. Through this innovative approach, users can participate in a decentralized validator network, contributing to the security and decentralization of the Solana ecosystem. Users can stake assets to strengthen Solana's decentralization, earn native yields through MEV-boost, and obtain annual percentage yields (APY) from delegated assets. Its functionality is similar to EigenLayer. Currently, Solayer supports deposits of native SOL, mSOL, JitoSOL, INF, and other assets.
A helpful analogy is to think of highway lanes as different stake tiers on a blockchain. The left lane is the most expensive, while the right lane is cheaper, reflecting varying toll fees. On this highway, the cheaper lanes typically have more cars, symbolizing application (dApp) usage.
In this analogy, the highway lanes represent different stake tiers on the blockchain, the toll fees represent the required collateral, and the continuous flow of cars represents applications (dApps) on the blockchain. Restakers delegate their stakes to projects, earning project token rewards through services, while validators are the lanes that allow cars (dApps) to pass.
Solayer acts as the coordinating infrastructure between toll booths (restakers), cars (dApps), and the highway (validators). By accepting user fund delegation and coordinating various roles, Solayer leverages Solana's stakers as validators, offering high decentralization and security without relying on centralized service providers or native tokens. It provides a simple way for decentralized applications (dApps) to create their own AVS LSTs, which are based on Solana's native staking yields and include additional MEV rewards. Furthermore, dApps can receive a share of staking commissions and, in the future, configure underlying operators for stake delegation.
Technical Differences: Exogenous AVS vs. Endogenous AVS
As Solana's answer to EigenLayer, Solayer differs functionally in the problems its restaking system addresses. EigenLayer primarily focuses on Ethereum's scaling solutions, while Solana, as an integrated blockchain, does not rely on Layer 2 solutions like modular Ethereum. Therefore, Solana's restaking system needs to focus more on the needs of applications (dApps).
EigenLayer introduces exogenous AVS. This means systems outside the main Ethereum network—such as oracles, rollups, and data availability layers—can continue to share Ethereum's proof-of-stake security.
Solayer is introducing endogenous AVS: Solana's on-chain native programs that utilize SOL proof-of-stake to enhance application security and throughput. These include exchanges, NFT marketplaces, meme coins, and anything else involving on-chain activities.
Solayer is redefining restaking for Solana while addressing the security and performance requirements of developers, especially as base L1 network congestion increases. It proposes endogenous AVS: Solana-native programs that use SOL PoS to configure application security and throughput.
In simple terms, Solayer allows dApps on Solana to reserve their own space and processing capacity on the blockchain. This makes the network more efficient and reliable for everyone using these applications.
Progress of Solayer's Restaking
Solayer Labs is rolling out a phased points incentive program designed to reward early participants.
The Genesis phase (Epoch 0) was a private, invite-only, limited-time event.
Following this, Epoch 1 began on May 27, continuing the momentum from the Genesis phase. During this stage, a TVL cap of $50 million was set, attracting over 9,000 addresses and reaching the cap by June 15. Users who deposited more than 10 SOL during Epoch 1 not only received permanent invitation codes but also had the opportunity to earn higher points by completing at least three tasks.
As the program moved into Epoch 2 and Epoch 3, the TVL cap was removed, allowing users to stake freely. Compared to other assets, SOL deposits earned more points.
Now, Solayer has entered Epoch 4, where sSOL is fully transferable and unstakable. Users can leverage diverse DeFi strategies and selected partners on Solana for trading and other activities.
How to Use Solayer for Restaking
Follow these steps to get started:
- Connect your wallet—Phantom, OKX, or Backpack are recommended—and confirm the signature.
- Link your social media accounts; this step is quick, but joining the Discord community is advised.
- Deposit any supported asset; staking SOL offers an 8.12% APY.
- Deposit any amount; depositing 10 SOL or more grants an invitation link.
👉 Explore restaking strategies
Challenges and Opportunities for Solayer in the Solana Ecosystem
Liquid staking-derived restaking projects offer additional yield opportunities for idle staked assets, extending the security of Ethereum's base layer. However, within the Solana ecosystem, the necessity and effectiveness of restaking remain topics of debate.
Ryan Connor of Blockworks Research notes that Ethereum, as a modular blockchain, relies on Layer 2 solutions. Its vast staked asset base gives restaking practical utility. In contrast, Solana, as an integrated blockchain, has a relatively smaller need for restaking.
Restaking protocols themselves, along with potential "nesting" risks, raise user concerns. These include a lack of trust in protocols and fears of hacking, both of which are potential risk points. Despite this, Solayer, as the highest TVL restaking protocol on Solana, remains worthy of attention. Jason, co-founder of Binance Labs, stated: "With the support and strong backing of Binance Labs, we are one step closer to realizing our vision of strengthening the Solana ecosystem and delivering greater value to dApps on Solana."
As a leading high-performance public chain, Solana faces challenges such as network outages, transaction failures, and MEV issues, even as its ecosystem thrives. If Solayer can provide dApps on Solana with greater block space and prioritized transaction processing, Solana has the potential to become a cornerstone of future decentralized networks and economies. Solayer could then emerge as cloud infrastructure, supporting the widespread adoption of scalable and complex applications, thereby driving the entire ecosystem forward.
Frequently Asked Questions
What is restaking?
Restaking allows users to redeploy their already staked assets to secure additional services or protocols, earning extra yields while enhancing network security.
How does Solayer differ from EigenLayer?
While both are restaking protocols, EigenLayer focuses on extending Ethereum's security to off-chain systems, whereas Solayer emphasizes on-chain native programs within Solana to improve throughput and application security.
What assets can I stake on Solayer?
Solayer currently supports native SOL, mSOL, JitoSOL, INF, and other liquid staking tokens, offering flexibility and diverse yield opportunities.
Is restaking on Solana necessary?
Given Solana's integrated architecture, the need for restaking is debated. However, projects like Solayer aim to address specific challenges like network congestion and dApp performance.
What are the risks of restaking?
Key risks include smart contract vulnerabilities, protocol trust issues, and potential hacking events. Users should assess these factors before participating.
How can I maximize my yields on Solayer?
Depositing SOL typically offers higher yields and more points in incentive programs. Engaging in tasks and leveraging invitation codes can further boost rewards.