Yes, I’ve seen bonk’s announcement to release their own LST a while back… the possibilities are sending my mind out there.
I’ve been using mSOL because they actively monitor the performance of the validators and adjust the allocations accordingly to incentivize performance. How does your protocol deal with low performance validators?
Amazing job explaining what a depeg event looks like. Showing how LSTs are safe I feel would be the easiest way to gain more adoption and eventually get groups to convert native staked SOL into the powerful, versatile LSTs that are out there. SOL ecosystem is here to stay so let’s make y’all’s dream a reality!
This is already live btw! You can buy bonkSOL by going to Sanctum - The stability protocol of Solana
Good question. There are two parts:
Launching new LSTs. We currently vet our projects very closely to make sure that 1) they’re legit projects, and 2) there’s differentiated utility for the LST they want to launch. However, we this process will become more and more permissionless over time. We won’t control what LSTs will be out there, but we are building LST dashboards (one already exists at SolanaCompass), to let people know if this happens. Here again thanks to Sanctum, it’ll be very quick and easy to swap from one LST to another.
LSTs in Infinity. Infinity is a basket of LSTs, and its performance will depend a lot on the LSTs in the pool. Unlike the first section, we will take an active role in rebalancing Infinity to cut poor LSTs. We can either sell the LSTs in the market (see our docs for details), or do a manual rebalance. We monitor pool performance and composition very closely.
I wanted to highlight a great question from NFTMODS on Discord:
After reading your intro I learned a lot about the accomplishments with LSTs and INF. There is a clear value and high potential adoption for what youre building, kudos!
I am curious as to how a DAO will participate in governing Sanctum? What is the proposition for a token and raise on LFG?
Two reasons:
We are building critical infrastructure on Solana that will underwrite hundreds of billions of dollars in value. This is far too important to leave in the sole control of the team.
What we’re building requires community buy-in. We are building an entire new future of Solana. We are forging a new meta, rewriting how liquid staking works on any chain – this is something that we absolutely cannot do without everyone’s help. We are building a three-sided marketplace of LST holders (demand side), LST creators (supply side), and liquidity providers (service side) – this is the hardest (but also most worthwhile) thing to build.
The purpose of a token has always been to distribute and align incentives, which perfectly aligns with the above two points. We want a significant chunk of the token to be in the hands of the community, so that if anything happens to the current team, the community can step in. We also want the community to have a significant share in the upside – we are building this awesome new future together, and those who help build it should be richly rewarded.
I’ll share something I’ve never shared on a public forum before. We were getting ready to launch our token in January 2022 with Socean. We had a ton of traction, and built out the entire IDO website – but I put the brake on it because I felt what we had built wasn’t compelling enough yet. We have been building non-stop since February 2021 and kept pivoting until we built something truly worthy of a token. This is it.
Jupiter’s governance is amazing. I’ve taken three learnings away from it:
Don’t decentralise everything right away; execute with a long time horizon. It was smart for Jupiter not to commit to any revenue share yet. The most important thing is to secure the long-term future of the protocol, because Jupiter is foundational infrastructure. Sanctum is similar. We’ve been building on liquid staking for three years, through the depths of the bear; we don’t have all the answers, but we know the space better and have a longer time horizon than 99.99% of tokenholders. First make sure we can build Sanctum out into a robust, well-capitalised public good that can survive and thrive in perpetuity.
At the same time, give people something meaningful to do with their token. Governance is too often theater, and too often we’ve seen it devolve into pure bribing or gauges or silly staking games. If we do that, we are dead. That’s giving up on growth and moving towards a pure value extraction mindset. There is 100x more potential in the Sanctum token.
In the infinite-LST future we will launch hundreds if not thousands of LSTs. But we have limited resources and attention. I want the community to vote on which ones they think will have the most potential, and then we will put all our resources into supporting these LSTs – a bit like Jupiter’s LFG. Every single one of these new LSTs could potentially unlock billions of dollars in value, so this is very impactful governance.
Keep it simple. In the past it was all the rage to have complicated veCRV models. This is overcomplicated. Jupiter’s lockup schedule is simple and clean, 30 day linear unlock, very easy to understand. It’s a clear show of strength – no need to lock your token for 5 years, sell it if you want – we’re confident that what we’re building will stand the test of time.
We want to ensure long-term token health. Naked gauges, bribing, rushing to revshare, clever staking or locking mechanisms – these guarantee short term action, but also a slow death.
Decentralisation is not just a buzzword. We will eventually be larger than Lido so it’s important that we don’t end up the same way. Luckily, our model involves hundreds of different LSTs, not a single one. Eventually all of the infrastructure we build will be fully decentralised and owned by DAO, but this must be done carefully to avoid hostile takeovers.
To support Jupiter and the decentralised meta. We’ve known and worked with the Jupiter team very closely all the way since 2021. We are very happy to support this initiative.
To give people a chance to get in on the ground floor. We’ve been approached by quite a few CEXes already and having spoken to many founders, many CEXes are predatory and often benefit from pumping and dumping the token. We absolutely do not want people to get dumped on. Jup LFG is a way for us to get the token to as many Solana natives as possible in an extremely retail-friendly way.
To get our token into as many hands as possible, but the right ones. We are building something OPOS, something that will benefit all of Solana. LFG is Solana-native and the people here – you guys – are the people we want to bring onto the Sanctum community.
Really interesting stuff.
Apologies in advance for the far-left bell curve question and I’m sure I missed it in the docs, but can you explain how the base liquidity layer of idle SOL in the Reserve to backstop all the LST’s is capitalized? It says in the docs there are “210,000 SOL sitting in the pool”, and also that it is not accepting deposits.
@ $200 SOL that is $42mm. Is it possible for the Reserve to be depleted? If so, what happens next?
Thanks!
These are great questions, not far-left at all!
Yes, it’s not accepting deposits right now – we’re looking at opening that eventually, but see the “little known secret” at the end.
It’s possible for the Reserve to be (momentarily) depleted, but the Reserve always unstakes all the staked SOL it receives every epoch, so it replenishes itself every epoch (~50h).
If the Reserve is depleted that’s not the end of the world – there are other sources of liquidity which Sanctum Router can route LSTs through, e.g. there are very large jitoSOL-SOL, mSOL-SOL, bSOL-SOL pools. As long as those exist then all LSTs will be able to go to SOL via those pools.
As the TVL of liquid staking grows we’ll need to increase the size of the Reserve. Here’s a little-known secret: the Infinity Pool can actually support Reserve within itself (after all, it supports SOL deposits). We might combine the two in the future. That would be amazing.
Big fan of Sanctum here and already staking with some of the validator LSTs.
One thing I have been wondering is how you go about creating general support for LSTs in DeFi, especially if there are going to be hundreds or even thousands of them. For example a simple use case like borrow-lend.
As of now the “big 3” LSTs mSOL, jitoSOL, bSOL are supported by all major DeFi platforms, how could this work for smaller validator LSTs? Would they have to be onboarded individually by DeFi protocols or is there a way for universal support?
Also who is “responsible” for this effort? Will Sanctum work with other protocols to get them to support as many LSTs as possible or is it entirely up to the individual validator/issuer to get their LSTs supported on different platforms?
I very much like the potential individual use cases that could be unlocked with indiviual LSTs, just wondering about the general stuff we already use LSTs for today.
I love all the docs and the depth of detail! I already used Sanctum and have some LaineSOL.
What is to prevent someone else copying the same model of Sanctum, to provide a base layer for LSTs? If that happens, what is your strategy?
It’s not a problem for DeFi protocols to onboard all of them – it’s more of a UX issue really. Jupiter for example didn’t have any issues onboarding our token, and we know that e.g. Kamino and Marginfi are able to onboard these LSTs as a batch.
The closest to universal support would probably be the Infinity token (INF), as we’re pushing hard to get that accepted everywhere. But we absolutely want all these LSTs to be integrated throughout the ecosystem, not just INF.
We work with protocols to get these LSTs listed, but there’s only so much we can do – protocols decide which LSTs to list primarily based on organic market demand and/or LST performance, which is something that individual LST issuers must work towards improving.
Thank you! We’ve been thinking and talking about this for years and it’s great to have our efforts finally recognised.
Our code is actually all open-source so anyone can actually deploy a fork of it today right now! With crypto, code is never the moat – community, mindshare, token, and integrations are. We’ve spent years building relationships with teams, validators, projects, people in the space; this is not something you can fork.
That being said, we want to design incentives such that people would rather work with us than fork us. What would be the point of forking us? We would fragment liquidity again and be back to square one.
I completely agree that another sanctum would fragment liquidity. I understood that you have a first mover advantage and have done years of homework in this space for someone to replicate easily.
Love what you said! I will be voting for Sanctum! Best of luck 
I’d love to see the DAO play a role in onboarding new LSTs similar to how JUP stakers for LFG. Just a thought
Hi, your writing this “we are launching token to reward early adopters, to align everyone under one big tent, to get everyone pushing for a better, more liquid Solana.”.
Who would you consider early adopters. Will users from this week be considered early adopters. IMO your TVL is still much less than 100 mill and your token havent yet launched . And if you are really meaning what you say by that you will have widespread attention and users, how are you going to get them or reward them?
I was kinda late to the party here, so it took a little more time to sift through all the posts and comments. To spare others who come after me (and help those who won’t have time to read all of it before voting), I try to start my contribution with a quick summary.
This image from @fplee 's post shows the value added by sanctum => deep, unified and immediate (i.e., no cooldown period for unstaking) liquidity for any kind of LST on Solana (no matter if it’s well established like mSOL or kinda rare like bonkSOL): Sanctum LFG: building the infinite-LST future - #35 by fplee
The purpose of the token is to distribute power (DAO) and let the community decide on new LST taken up by sanctum. Furthermore, INF is sanctums “JLP” token—the index-token which represents all LSTs in combination with a part of the trading fees. The infinity pool is already live.
I was wondering at some point, why would there be so many different LSTs? Simply put, LSTs can give more then annual yield for staking. Some LST providers share priority fees (jucySOL), others hand out their own token (BONK). Although their small in TVL, their very valuable but wouldn’t stand a chance against a jitoSOL.
In line with that, sanctums vision is that within an ecosystem (Solana, Ethereum) projects shouldn’t fight against each other but side-by-side as explained clearly by @Perry_Hope :
To achieve this vision, sanctum needs a reliable way of distributing their governance token. The LFG, of course, is exactly built for this.
Regarding security concerns; sanctums contracts are open source and audited. Additionally, the team is comprised of OGs.
Now I haven’t read the additional information yet, but some questions came up in the meantime:
Thanks a lot for the answers in advance and I’m more than happy to see this project here! 
PS: Sadly, the link to this article about INF economics seems to be broken
https://learn.sanctum.so/blog/understanding-sanctum/all-posts/a-deep-dive-into-the-economics-of-sanctum-infinity
Thanks for the summary! I know it’s hard for people to read so many posts, so that summary is helpful.
The most catastrophic risk is smart contract risk, which I have covered in a previous post here.
There are also other tail risks e.g. if Jupiter Router stops working or the chain is congested, but this is mainly an issue for users using LSTs on borrow-lend protocols rather than the LST itself.
Great question. This post answers it in more detail, but we have a whitelist process for all assets in Infinity. All of them run the same program (except mSOL), so there is no additional smart contract risk by adding these new assets.
We get a ton of inbound interest on new LSTs! We work with them all, but we can only give so many our marketing and art attention. I’d like the community to vote on new LSTs that we can signal boost as part of our upcoming Wonderland program:
Looks very impressive !
Excited to see how this develops
I have never been interested in LST, so the question is not about the project itself but about liquid staking. Isn’t this, in a sense, printing money out of thin air? When someone stakes for example $1000 in any token and then receives st tokens, then will stake elsewhere and receive further st tokens and so on and so forth. At some point, the initial $1000 may have the power of 5 or 6k and now multiply it by several hundred thousand market participants. I wonder whether such behavior may at some point end in a spectacular collapse and disaster for many people?
Staking in a Proof of Stake (PoS) network offers several benefits:
Earn Rewards: By staking your cryptocurrency, you can earn rewards in the form of additional tokens. These rewards are typically a percentage of the amount staked.
Network Security: Staking helps to secure the network by incentivizing participants to hold and validate transactions. This reduces the risk of attacks like a 51% attack.
Voting Rights: Some PoS networks allow stakers to participate in governance decisions, such as protocol upgrades or changes.
Passive Income: Staking provides a way to generate passive income from your cryptocurrency holdings, similar to earning interest on a savings account.
PoS rewards typically come from two main sources:
Transaction Fees: When users make transactions on the PoS network, they pay fees. A portion of these fees is distributed to stakers as rewards for participating in the validation process.
Block Rewards: Similar to Proof of Work (PoW) networks like Bitcoin, PoS networks also create new tokens as block rewards. These newly created tokens are distributed to stakers as incentives for securing the network and validating transactions.
These rewards incentivize participants to stake their cryptocurrency and contribute to the network’s security and operation.
Compared to banking and borrowing more money, staking in a PoS network involves less risk because you’re not borrowing funds that need to be repaid with interest. Instead, you’re simply locking up your existing cryptocurrency holdings to support the network and earn rewards. Additionally, staking typically involves lower fees compared to traditional banking services. However, it’s important to consider the volatility of cryptocurrency prices and the potential risks associated with staking, such as slashing penalties for validating incorrect transactions.
This isn`t answer to my question
