Author: FLOW, crypto researcher

Compiled by: zhouzhou, BlockBeats

Editor's Note: This article introduces Jito Labs' (Re)staking protocol on Solana, which allows users to earn higher yields by using already staked SOL assets and potentially participate in Airdrop. Users can (re)stake SOL through three providers, namely Renzo, Fragmetric, and Kyros, each offering different levels of risk, liquidity, and potential returns. The article provides a detailed comparison of their characteristics and recommends choosing Kyros, which supports fair launch and potential Airdrop rewards.

The following is the original content (for the convenience of reading comprehension, the original content has been reorganized):

After successfully building the largest liquidity stake protocol on Solana, Jito Labs is bringing another important development: the launch of a new re-stake protocol - Jito Re-stake. This re-stake project goes live today and will soon open deposits, with an initial re-stake limit of approximately 25 million US dollars (147,000 SOL). For those who want to earn higher SOL annualized returns and hope to participate in the Airdrop opportunity ahead of time, this is a very attractive opportunity in the current market.

Before we introduce how to maximize the use of this opportunity, let's briefly review the basic principles of Jito and stake.

What is Jito re-stake

Simply put, re-stake refers to using assets that have already been staked to provide additional security for a specific Decentralization service. Although it may seem insignificant, it is actually one of the most promising innovations in this cycle. This concept was pioneered by EigenLayer and first launched on the ETH mainnet in June 2023.

An example of the actual operation of stake again

Today, Jito finally brings this new technology to Solana through its stake again program.

Jito demonstrates the composition of stake again

The core components of the Jito re-stake framework

The Jito re-stake framework consists of two main components: the re-stake program and the treasury program. They can be seen as two independent entities that work together to provide a flexible and scalable infrastructure for creating and managing stake assets, treasury receipt tokens (VRT), and NodeConsensus operators (NCN). VRT is the term Jito uses for the liquid re-stake tokens, while NCN is similar to the active validation service in EigenLayer, representing entities that will utilize the Jito re-stake solution.

The main function of the stake program is to manage the creation of NodeConsensus operators (NCN), the user selection mechanism, as well as reward distribution and penalty mechanism. This part is invisible to users and can be seen as the core support of Jito's stake solution.

The Treasury program is responsible for managing the flow of stake tokens (VRT) and customizing different stake strategies through DAO or automated protocols. This is the main interface for users to participate in stake. It can be compared to the stake role of EigenLayer, which is served by the stake program on Solana, while the Treasury program is similar to EtherFi, acting as a liquidity layer between users and the core stake protocol.

Image display of how the Vault program works

3 VRT Providers

In the early stages, Jito only collaborates with three VRT providers: RenzoProtocol ($ezSOL), fragmetric ($fragSOL), and KyrosFi ($kySOL), which will collectively distribute an initial cap of 147,000 SOL. Therefore, any users wishing to stake SOL through Jito need to make a choice among these three VRT providers.

The login page image of Jito (Re)staking

The following is a brief summary of the main features of each VRT provider:

How to choose the right VRT for SOL re-stake?

The key to choosing which VRT lies in finding the best risk-reward ratio.

The following is the analysis provided by each provider:

1. Risks: In terms of risk, the main follow protocol penalty (i.e. penalty risk) and Liquidity risk. Due to the current small amount of NCN and the early stage, it can be considered that the risk of all providers is basically the same. Renzo and Kyros accept the best Liquidity of JitoSOL, while Fragmetric accepts a greater variety of Liquidity staked Tokens (LST), which may increase its Liquidity risk. In addition, Renzo and Kyros' VRT will have Liquidity from the beginning, while Fragmetric's Tokens are not transferable in the initial stage. Therefore, in terms of risk, Renzo and Kyros have the lowest risk, while Fragmetric has slightly higher risk.

2. APY Return: The APY for each project is expected to be similar, but Renzo and Kyros can be expected to have a slightly higher expected APY than Fragmetric, as they only use JitoSOL, but the difference will not be significant.

3. Airdrop potential: Given that all VRT have similar risks and expected returns, the key factor in choosing a specific VRT lies in the potential Airdrop rewards. Renzo already holds Token, although staking may result in some future Airdrop points, the potential is relatively low. Kyros and Fragmetric currently have no Token, and thus have a higher Airdrop potential.

Further analysis of the differences between Kyros and Fragmetric:

Features of Fragmetric: expected to receive venture capital support, may follow high FDV, low circulation model; biased towards technical and Decentralization user groups; collaborate with Risk Management company Gauntlet; Token is not transferable in the initial stage; accepts multiple LST.

Kyros features: backed by SwissBorg to help distribute $kySOL and potentially collaborate with major players in Solana; may raise funds through a fair community-driven token model; not yet started large-scale promotion; NCN distribution method may be based on DAO voting; supports JitoSOL.

Overall, KyrosFi is more attractive in several aspects. First, the support from SwissBorg makes it easier to distribute $kySOL and opens doors for its major partnerships with Solana. Second, Kyros may adopt a fair launch approach. Finally, Kyros is currently relatively low-profile, making its Airdrop reward potential more attractive.

Of course, this is a personal opinion, for reference only. I hope this analysis can help you make a wiser decision when staking SOL again.