SOL Strategies teases passive income opportunity in STKESOL liquid staking token launch

Source Cryptopolitan

SOL Strategies, one of the leading Solana treasury companies, launched a liquid staking token. STKESOL tokens will allow holders to earn rewards from the network activity.

SOL Strategies will launch STKESOL, a new liquid staking token with built-in rewards. The company will be able to draw in both crypto natives and traditional investors with a new asset, compatible across other DeFi applications. 

The launch of STKESOL means SOL Strategies will draw in more SOL deposits for staking. The depositors of SOL will receive both passive rewards and be able to use STKESOL on DeFi platforms. 

STKESOL will be usable as a loan collateral on lending platforms such as Kamino and Loopscale. The token aims to lower its risk as it is backed by staking in multiple validators, to spread counterparty risk.

Following the news, SOL traded at $127.79, pressured by the overall crypto market downturn.

SOL Strategies chooses more active treasury management

SOL Strategies is a relatively small DAT company, with around 427,640K SOL. The company is ranked 10th among other treasury builders. Of that total treasury balance, 406K are staked for passive income at around 6.7% per month. SOL Strategies is also running a validator on Solana. 

SOL Strategies launches liquid staking token
SOL Strategies is ranked 10th among other DAT companies and is itself running a validator to secure the network. | Source: Strategic SOL Reserve

The company has a higher share of staked SOL compared to other treasury companies. ETFs and DATs companies stake less than 50% of their available SOL, holding the rest of the tokens in idle wallets. 

SOL Strategies also ensures the infrastructure for its liquid staking token, which will draw in diversified passive income from multiple validators. 

The company aims to achieve the best possible yield based on validator performance. Yield-based products may offset the market risk, while also supporting the Ethereum ecosystem. SOL Strategies already announced that around $70M or 545K SOL have been deposited to mint the STKESOL liquid staking token. 

Stake SOL focuses on liquidity, tax protections 

Staked SOL removes coins from circulation, while leaving holders with no capital. Liquid staking tokens reflect the amount of staked SOL and bring a new asset, which can be traded, deposited, or used as a lending collateral. 

Liquid staking tokens aim to avoid the two-day waiting period when unstaking SOL. Liquid staking tokens can be traded, while the original SOL stake remains. 

Based on different jurisdictions, liquid staking tokens may bypass taxation, at least while the underlying asset is still staked. The tax exemptions may vary depending on local tax laws. 

Liquid staking tokens are widely accepted in the Solana ecosystem and are represented on most decentralized exchanges.

Liquid staking tokens can also be used in LST multiplier products, where holders can loop or leverage an LST combined with SOL to achieve a higher yield. The technique works because some of the LST yield is higher than the cost of borrowing SOL. The strategy is risky, and the yields may change under different circumstances.

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Disclaimer: For information purposes only. Past performance is not indicative of future results.
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