As the market gradually recovers, the Sanctum airdrop has landed, though it fell short of expectations. With a large amount of capital “unlocking,” what will be the next noteworthy project in the Solana ecosystem to attract significant capital inflows?

Solayer, a new star in Solana’s restaking scene, announced the completion of its builder round of financing on July 2, with a strong lineup of investors. As of July 15, its platform TVL (Total Value Locked) has exceeded $120 million. With the anticipation of airdrops, can Solayer attract more capital inflows? How can one participate in the project? This article provides a quick overview of this promising new restaking project on Solana.

Source：https://defillama.com/airdrops?chain=Solana

What is Solayer?

Solayer is a restaking protocol within the Solana ecosystem. Leveraging its decentralized cloud infrastructure advantages, it allows SOL holders to stake their assets into other Solana ecosystem protocols or DApp services that require security and trust. Besides POS staking rewards, users can also earn MEV and AVS rewards. Currently, Solayer supports the deposit of native SOL, mSOL, JitoSOL, and other assets.

Solayer utilizes Solana’s stakers as validators, providing a high degree of decentralization and security, thereby avoiding the trust risks associated with centralized service providers or proprietary tokens. It offers decentralized applications (DApps) a simple way to create their own AVS LST (Liquid Staking Tokens). These tokens provide basic rewards from Solana’s native staking returns, along with additional MEV rewards. DApps can also earn a portion of the staking commission and in the future, configure the underlying operators for staking delegation.

Source：https://docs.solayer.org/

Solayer’s role can be summarized in simpler and more straightforward terms. Imagine Solana as a highway with different lanes having varying tolls and congestion levels. Different DApps, like cars, require different speeds and can accept different tolls. Solayer acts as the coordinator, managing the cars, highway, and toll collectors by accepting user funds.

Source：https://docs.solayer.org/

Funding Status

Solayer currently has no institutional investors. However, the investors in its builder round announced on July 2nd are quite strong, including Solana Labs co-founder Anatoly Yakovenko, Solend founder Rooter, Tensor co-founder Richard Wu, and Polygon co-founder Sandeep Nailwal.

Source：https://x.com/solayer_labs/status/1807797264934678588

EigenLayer on Solana: Exogenous AVS vs. Endogenous AVS

As Solana’s version of EigenLayer, the main functional difference lies in the focus of the restaking system. EigenLayer’s restaking is primarily aimed at Ethereum’s scaling solutions. However, Solana, being an integrated blockchain, does not rely on Layer 2 solutions like modular Ethereum does. Therefore, its restaking system needs to focus more on applications.

Solayer is not only used for Exogenous AVS (Exogenous - Actively Validated Services) but also focuses on Endogenous AVS (Endogenous - Actively Validated Services) within the Solana blockchain. The goal is to provide decentralized applications (DApps) on the Solana chain with greater block space and the possibility of prioritized transactions.

Solayer redefines EigenLayer’s restaking design as Exogenous Actively Validated Services (AVS). These systems are located off-chain or outside the Ethereum main chain but can leverage Ethereum’s proof-of-stake security.

Exogenous AVS are defined as systems that are off-chain or outside the main network but can share proof-of-stake security, such as cross-chain bridges, shared sequencers, oracle networks, etc.

Source：https://docs.solayer.org/

Solayer redefines restaking for Solana, addressing the security and performance needs of developers, especially as congestion on the base L1 network increases. It introduces Endogenous AVS: Solana-native programs that use SOL PoS to configure application security and throughput. Endogenous AVS is defined as supporting decentralized applications (DApps) on the mainnet, aiming to provide DApps with greater block space assurance and prioritize transaction inclusion.

Source：https://docs.solayer.org/

The unbinding process of Solayer AVS is managed separately by the delegation manager. To provide greater flexibility, Solayer allows them to design their own unbinding processes, with the maximum unbinding time not exceeding 2 days. Solayer will also offer an emergency exit mechanism to release bound assets from users in case the AVS ceases operations.

How to Restake on Solayer?

Solayer Labs is developing a multi-stage points program that prioritizes rewarding early participants. The earliest depositors (whitelisted early supporters) will have 24 hours to deposit any amount, benefiting from a higher points multiplier effect. The first phase started on May 27, with a total locked value (TVL) cap of $50 million for cycle 1, which was reached by June 15. During this period, depositing more than 10 SOL unlocked a permanent invitation code, allowing access to the task interface. Completing more than three tasks, similar to those in other projects (such as inviting friends, depositing LSTs, and maintaining deposits over two phases), earned higher points. Currently, in the third phase, there is no TVL cap, and staking can be done at any time. Native SOL deposits earn more points compared to other tokens.

Restaking Security and the Future

Restaking projects, derived from liquid staking, can utilize idle staked assets to generate additional yields, extending the base layer security for Ethereum. However, the necessity of restaking for Solana is still under much debate. According to Ryan Connor from Blockworks Research, Ethereum is a “modular” blockchain that relies on Layer 2 operations. Its large base of staked assets makes restaking highly practical. In contrast, Solana is an “integrated” blockchain with much smaller restaking needs compared to Ethereum and other modular systems.

Furthermore, the inherent risks of restaking protocols, such as recursive staking (often referred to as “protocol nesting”) and security concerns, lead many users to worry. These concerns include a lack of trust in protocols, fear of hacker attacks, and potential vulnerabilities—considered ticking time bombs. Despite these concerns, Solayer remains noteworthy as the highest TVL (Total Value Locked) restaking protocol on Solana.

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