Restaking is a concept that allows users to reuse their Proof-of-Stake staked assets as collateral in other Proof-of-Stake systems, also known as Actively Validated Services (AVSs). This enhances the security and efficiency of the ecosystem. Restaking is crucial because it maximizes the utility of staked assets and allows for better resource allocation.

Solayer integrates advanced restaking mechanisms that enhance Solana’s security and scalability. This allows Solana users to restake their assets, contributing to the network’s robustness while earning additional rewards. Solayer’s approach ensures that the Solana blockchain remains secure and efficient, even as it scales to accommodate more users and transactions.

What is Solayer?

Source: Solayer website

Solayer is an advanced restaking protocol built natively on Solana. It empowers on-chain decentralized applications (dApps) with improved network bandwidth while enhancing L1 security. By allowing users to restake their staked assets, Solayer secures multiple networks simultaneously, leveraging existing tokens to provide additional security layers without extra capital.

Key Features and Functionalities

• Restaking Mechanism: Solayer enables users to restake their SOL tokens, maximizing their utility and earning potential.
• Shared Validator Network: Using a shared validator network, Solayer ensures efficient and secure validation processes.
• Reward Distribution: Users earn rewards for participating in the restaking process, incentivizing active participation and network security.
• User-Friendly Interface: Solayer offers an intuitive interface, making it easy for users to manage their restaking activities.

Why Solayer is Built on Solana

Solayer, co-founded by Rachel Chu and Jason Li, is built on the Solana blockchain due to its high throughput and low transaction costs. Solana’s architecture allows for fast and efficient transactions, which is essential for a restacking protocol.

Solana’s robust ecosystem and active community also provide a strong foundation for Solayer to thrive. By leveraging Solana’s capabilities, Solayer can offer a seamless and efficient restaking experience to its users. The primary goal is to provide Solana dApps with increased capabilities for securing block space and prioritizing transaction inclusion.

Core Components of Solayer

Restaking

The restaking component of Solayer includes several key elements:

1. Restaking Pool Manager: This oversees the flow of assets and their conversion into Solayer-specific tokens, such as sSOL. This ensures that assets are efficiently managed and utilized within the Solayer ecosystem.

2. Delegation Manager: It handles the distribution of stakes across validators and Autonomous Validator Sets (AVSs). This ensures that the staking process is balanced and that network security is maintained.

3. Stake Pool: It manages the selection of validators and optimizes returns through MEV (Maximal Extractable Value) boosting. This component ensures users receive the best returns on their staked assets.

Shared Validator Network

The Shared Validator Network in Solayer facilitates two important functions:

1. Cross-chain Interoperability: SVN allows Solana-based chains to share security, enhancing the network’s overall robustness. This interoperability ensures that different chains can benefit from the security provided by the shared validator network.

2. Optimized Resource Allocation: It efficiently distributes network resources based on the stake amount. This ensures that resources are used effectively, enhancing the network’s performance and security.

Solayer Architecture

Solayer’s architecture is designed to provide a robust, flexible, and scalable restaking solution on the Solana blockchain.

Restaking Pool Manager

The Restaking Pool Manager is the core component overseeing asset flow into the protocol. Its key functions include:

1. Processing User Deposits: It handles Liquid Staking Tokens (LST) or SOL deposits.

2. Converting SOL to sSOL-raw: It manages the conversion process to create Solayer-specific tokens.

3. Issuing Fungible Token Representations: The Restaking Pool Manager issues Solayer assets to facilitate points calculation for the liquidity reward program.

Unbonding and Delegation

• No Unbonding Lockups at Base Layer: Solayer assets have no unbonding lockups at the base layer.
• AVS Unbonding Managed Separately: The Delegation Manager handles unbonding for Autonomous Validator Sets (AVSs), which can design custom unbonding processes with a maximum 2-day period.
• Emergency Exit Mechanism: This mechanism is available for AVS failures, protecting user assets.

Rewards Accounting

• Offline Calculation of Rewards: Reward accounting ensures accurate reward distribution using the Solayer protocol.
• State Watcher Implementation: It tracks deposits and withdrawals.
• Real-time Application of Additional Rewards: It is based on invite relationships, enhancing user engagement.

Key Protocol Methods

1. Restake Method

   • Permissioned

   • Requires additional server signature

   • Enables deposit limit enforcement in initial epochs

2. Unstake Method

   • Non-permissioned

   • Does not require additional Solayer signature

Protocol Development Stages

Stage 1: First Implementation

• Focus on asset intake and conversion

• Rewards accounting and distribution

Stage 2: Current Implementation

• Users can pledge Solayer assets to secure additional networks

• Delegation to Solayer operators managing AVS nodes

• Introduction of operator penalties for malicious behavior

• Users construct restaking portfolios by selecting node operators and Shared Validator Networks (SVNs)

• Non-fungible tokens issued to represent user portfolios

Solayer Restaking Mechanism

Native SOL Restaking

Solayer allows users to restake their native SOL tokens. This process involves staking SOL tokens within the Solayer protocol, which Solayer then converts to an intermediary form called sSOL-raw, the Liquid Staking Token (LST) issued by the stake pool manager.

This non-custodial process ensures that staked SOL is delegated to validators who earn MEV-boosted returns. The sSOL-raw is then converted to sSOL after another interaction with the Solayer restaking pool manager. For efficiency, all these steps are executed in a single transaction.

How to Natively Restake on Solayer

1.Navigate to the Solayer dashboard and choose “Deposit Native SOL.”

2.Select the amount you wish to stake, click “Deposit” and confirm the transaction.

3.Congratulations! You have successfully deposited native SOL.

LST Restaking

In addition to native SOL restaking, Solayer supports the restaking of Liquid Staking Tokens (LSTs) in its infrastructure. The initial ones supported include Marinade-SOL (mSOL), JITO-SOL (JITO-SOL), Blaze-SOL (bSOL), and Infinity-SOL (INF). Solayer will monitor for other potential LSTs to be added to the restaking bucket.

How to Restake LSTs on Solayer

1.Navigate to the Solayer dashboard and choose either to deposit mSOL, JITO-SOL, bSOL, or INF.

2.Select the amount of the LST you wish to stake, click “Deposit” and confirm the transaction.

3.Congratulations! You have successfully deposited your chosen LST.

Unstaking Tokens on Solayer

Tokens can only be withdrawn from a stake account when not delegated. When you first un-delegate a stake account, it enters a “cooldown” phase.

Tokens cannot be withdrawn until this process is complete and they are “inactive,” meaning they no longer earn staking rewards. Once tokens in a stake account are inactive, they can be immediately withdrawn to your main wallet address.

How to Unstake from Solayer

1.To unstake your deposit, click on “Withdraw.”

2.Select less than your current deposit or press “MAX” to withdraw the full amount.

3.Confirm the amount to be unstaked.

4.Initiate the unstaking process and confirm the unstaking in your wallet.

5.Manually deactivate your stake account by clicking on the “Deactivate” button in the “Manage Stake Accounts” section.

6.Press on “Deactivate” and confirm the deactivation.

7.Congratulations! You have successfully withdrawn your deposit.

Delegation

The Solayer stake delegation process is straightforward:

• Conversion: Users convert SOL into its natively staked form, sSOL.

• Delegation: Staked SOL is delegated to Solayer-recommended validators, which then delegate it to a Delegated dApp (endogenous AVS) on Solayer, converting sSOL to a delegated form.

• Minting Tokens: Solayer dApps mint Delegate Tokens, which serve as stake proof to retrieve staked SOL and claim rewards.

Solayer Endogenous AVS

The Endogenous Autonomous Validator Set (AVS) is a critical component of Solayer’s architecture. It is designed to enhance the security and efficiency of the restaking process by providing a decentralized and automated system for managing validator sets.

Key Features of the Endogenous AVS

1. Decentralized Management: The AVS operates decentralizedly, ensuring that no single entity controls the validator set.

2. Automated Validator Selection: The AVS automatically selects validators based on predefined criteria like performance and reliability. This automation maintains the integrity of the network.

3. Custom Unbonding Processes: AVSs can design custom unbonding processes with a maximum 2-day period. This flexibility allows for tailored solutions that meet the specific needs of different users and applications.

4. Emergency Exit Mechanism: In the event of AVS failures, an emergency exit mechanism protects user assets. This feature ensures that users can safely withdraw their staked assets if necessary.

Solayer Ecosystem

Restaking Epochs

The Solayer Restaking Epochs are designed to ensure the safety and security of our protocol developments while optimizing for the best user experience. Through these carefully managed phases, we provide participants a secure and efficient environment, facilitating smooth interactions and maximizing benefits. These epochs have already seen significant engagement, with millions in restaked deposits demonstrating our platform’s robust interest and trust.

Epoch 0: This is a 24-hour private access period, during which only community members who have received an invite code can participate in the restaking pool. This private access is restricted to whitelisted addresses that have been provided with a unique access code. Solayer only allocated 100 private access codes to its earliest supporters.

Epoch 1: Epoch 1 of the Solayer launch continued the momentum built during Epoch 0, opening the doors to a broader audience and increasing the opportunities for participation. Starting on May 27th, Epoch 1 had a TVL cap of 50 million USD. This stage saw a significant increase in total depositors, reaching over 9,000 from Epoch 0 to the end of Epoch 1. As of June 15th, 2024, there are about $50 million locked. Unlike Epoch 0, no time limit was imposed on Epoch 1, allowing participants ample time to engage with the restaking pool. However, native SOL deposits were prioritized to ensure the stability and growth of the platform. Participants who deposited 10 native SOL received a permanent referral link, granting them a significant advantage.

Epoch 2: Epoch 2 of the Solayer launch is set to expand the platform’s reach and participation further, offering unlimited TVL within a capped 24-hour period. During this stage, the restrictions on TVL are lifted, allowing for unrestricted growth and participation from the community. However, the window to join is limited to 24 hours, making it crucial for participants to act quickly and secure their place in the restaking pool. Key details of Epoch 2 include:

• Duration: 24 hours

• TVL Cap: Unlimited

• Participation: Open to all eligible members

• Priority: Native SOL deposits are encouraged

Epoch 3: Solayer Epoch 3 was launched on July 1 with the release of “Episode 1” on July 2, enabling depositors to claim rewards.

Epoch 4: The Solayer Epoch 4 began on July 30, 2024. In Epoch 4, Solayer Restaking allows SOL or Liquid Staked SOL (LST) holders to participate in “delegated consensus.” Participants restake their assets in the Solayer Restaking Vault, where they are delegated to a group of operators who validate and earn rewards on other networks. Depositors who participated in previous epochs and are active in Epoch 4 are considered “existing” depositors, while those who joined during Epoch 4 are “new” depositors.

Solayer Valley Episodes

The Solayer Valley offers eligible participants the opportunity to redeem hidden gems for future retroactive claims tied to major product and feature milestones. Each episode represents an alternate world where users unlock and experience Solayer’s milestones. Participation in these episodes is the sole method of receiving future retroactive rewards.

Episode 1: The Timebox Sanctuary: This episode blends shimmering brass with aged wood, creating an enchanting environment. Following the successful launch of the restaking epochs on May 16th, with $50M in restaked deposits across 2 epochs, Episode 1 focuses on rewarding the Solayer community throughout these restake epochs. Eligible members can stream, participate, and claim rewards.

What is Solayer SOL (sSOL)?

Solayer SOL (sSOL) is a Solayer-specific token representing staked SOL within the Solayer protocol. Users who stake their SOL tokens through Solayer receive sSOL in return. This token acts as proof of stake, allowing users to participate in the restaking process and earn rewards. sSOL is an intermediary form of SOL, converted through the Solayer restaking pool manager, ensuring efficient and secure staking operations.

How to Utilize sSOL

sSOL can be utilized in several ways within the Solayer ecosystem:

1. Restaking: Users can restake their sSOL to secure additional networks, maximizing the utility of their staked assets and earning more rewards.

2. Delegation: sSOL can be delegated to validators and Autonomous Validator Sets (AVSs) within the Solayer network. This delegation process helps maintain network security and efficiency.

3. Liquidity Provision: Future iterations of Solayer will introduce liquidity for sSOL, allowing users to participate in DeFi applications and enhance the composability of their staked assets.

4. Rewards Claiming: sSOL serves as a stake proof, enabling users to claim their staking rewards. By holding sSOL, users can track their staking performance and manage their rewards efficiently.

Getting Started with Solayer

How to Access Solayer Using Ledger

1. Ensure you have Phantom downloaded in your browser extension.

2.Click on the top left menu icon, then click on the plus button.

3.Click ‘Connect Hardware Wallet’ and complete the process of connecting the wallet with Phantom.

4.Make sure to enable blind signing, as the smart contract transactions cannot be displayed on Ledger. Therefore, for third-party integrations, you will only be able to sign the transaction if blind signing is on.

5.Navigate to app.solayer.org and make sure to click on ‘I have Ledger wallet for Phantom’.

6.Click on the Phantom tab, Choose Native Solana and input the amount you want to stake.

7.Confirm the transaction in your ledger and you have successfully staked Native SOL and you will see sSOL or sLST-SOL in your wallet as a representation SPL. Please note that it is NOT transferable and will be made redeemable/transferrable at a later Epoch noted in our release schedule.

How to Use Solayer with Phantom

1.Navigate to app.solayer.org, select Phantom as the option, and confirm the message signing.

2.Choose a pool and select “deposit”.

3.Enter the appropriate amount you would like to deposit and approve the transaction.

4.Congratulations! You have successfully deposited.

Conclusion

Solayer is an advanced restaking protocol built natively on the Solana blockchain, designed to empower on-chain decentralized applications (dApps) with improved network bandwidth and enhanced L1 security. By allowing users to restake their staked assets, Solayer maximizes their utility, contributing to the overall security and efficiency of the Solana network. As Solayer continues to evolve, it aims to offer even greater user flexibility and opportunities, solidifying its position as a key player in the Solana ecosystem.