Marinade: A Liquid Staking Protocol on Solana
Marinade is a decentralized liquid staking platform within the Solana ecosystem, enabling users to stake their assets and earn passive income.
From October to December 2023, Marinade's TVL soared by 400% to $1.8 billion, with its native token MNDE skyrocketing by 1000%. This surge is largely attributed to the rising popularity of SOL and the positive trends in the crypto market.
In the period from October to December 2023, SOL experienced a 400% growth, mirroring the trend seen across various Solana ecosystem tokens. MNDE stood out, surging 1000% from October 15 to December 5, reaching a yearly high of $0.66.
Nonetheless, certain drawbacks of Marinade could present future challenges:
In today's article, we'll take a detailed look at the Marinade project and explore the potential of the MNDE token.
The Story Behind Marinade
Launched in 2021, the origins and creators of the Marinade platform are shrouded in mystery, including details of investments in protocol development and the MNDE token launch.
The FTX collapse severely impacted Marinade. The close ties between FTX, Alameda Research, and the Solana network resulted in a 69% drop in locked funds on the platform in just a few days.
Marinade Finance has recovered since then and markedly improved its standing.
Marinade TVL Growth Trends. Source: defillama.com
Platform Mechanics
Marinade operates using the standard liquid staking platform model.
It provides multiple advantages to its users:
- Staking the native Solana token, SOL, with potential returns of up to 10% annually;
- Generating mSOL tokens through SOL staking, usable in various DeFi activities (trading, farming, lending, etc.);
- Staking the platform's native MNDE token;
- Participating and earning rewards in a referral program;
- Liquidity farming to gain passive income, potentially up to 10% per year.
Marinade's User Interface. Source: marinade.finance
These are all the tools available on the platform. Marinade is a highly accessible and user-friendly protocol, allowing users to understand its mechanics in just a few minutes.
More details about the liquid staking mechanism are outlined in the project's documentation.
The MNDE Token
MNDE serves as a marketing instrument for earning passive income via staking and governance in the Marinade DAO. Rewards in the referral program are also distributed in MNDE tokens.
According to Coingecko, the MNDE coin has the following features (as of press time):
- Price – $0.36
- Market Cap – $88 million
- Circulating Supply – 241 million
- Max Supply – 1 billion
- Daily Trading Volume – $5 million
- All-Time High – $2.54
- All-Time Low – $0.002
Marinade's success is largely credited to being the first platform to offer SOL staking, which significantly boosted its popularity. Consequently, this demand positively impacted the value of MNDE. However, potential investors should be cautious of the token's high volatility, as it's prone to rapid fluctuations, including possible drops of 70-80% in a single day, an important consideration for trading strategies.
MNDE's Price Dynamics. Source: coingecko.com
MNDE is actively traded across various decentralized exchanges within the Solana network, including platforms like Orca, Raydium, and Jupiter. It's also available on major CEXs such as Coinbase, BingX, Gate, and CoinEx.
The Pros and Cons of Marinade
Marinade's main attributes that have driven the success of both the platform and its native token include:
- The platform's ease of use;
- Competitive annual returns on staking;
- A rewarding referral program;
- A rapidly growing TVL, increasing its popularity, trade volume, and profitability from DeFi activities.
- The high volatility of the MNDE token, coupled with the risk of substantial drops during Solana market corrections;
- The dependence of TVL volume on the market price of SOL;
- The inability to withdraw funds locked on the Marinade platform for a set period (up to 20 days), as they are staked in official validator pools.
Final Words
At present, Marinade ranks as one of the foremost platforms for liquid staking on Solana. However, exploring other protocols, particularly those without their own tokens, might be beneficial for securing potential retroactive airdrops.
Our separate article offers more insights into these protocols and the possible actions that can be undertaken on them.
