Original Title: "Jito (Re)staking is here- Who will win the Solana restaking race?"

Authored by: FLOW, crypto researcher

Compiled by zhouzhou, BlockBeats

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

The following is the original content (for ease of reading and understanding, the original content has been slightly reorganized):

After successfully building the largest flow staking protocol on Solana, Jito Labs is once again bringing another important development: the launch of a new re-staking protocol - Jito Re-Stake. This re-staking project went live today and will soon open for deposits, with an initial re-staking limit of about $25 million (147,000 SOL). For those who want to get higher SOL annualized returns and hope to participate in Airdrop opportunities in advance, this is a very attractive opportunity in the current market.

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

What is Jito restake

In simple terms, re-stake refers to using assets that have already been staked to provide additional security for a specific Decentralization service. Although it may seem unimportant, 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

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

Illustration of Jito re-staking each component

Core components of Jito's 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 collaborate to provide a flexible, scalable infrastructure for creating and managing stake assets, treasury receipts Token (VRT), and NodeConsensus operators (NCN). VRT is the term Jito uses for liquid re-stake Tokens, while NCN is similar to the active validation service in EigenLayer, representing entities that will utilize Jito's 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 the reward distribution and penalty mechanism. This part is not visible to users and can be seen as the core support of the Jito stake solution.

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

Vault program how the image works

3 VRT providers

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

Image of Jito (Re)staking Landing Page

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

How to choose the right VRT for SOL restake?

When choosing which VRT to use, the key is to find the best risk-reward ratio.

The following is the analysis of each provider:

1. Risks: In terms of risks, the main penalty for following the protocol (i.e. penalty risk) and Liquidity risk. Due to the current small amount of NCN and the early stage, the risk of all providers can be considered basically the same. Renzo and Kyros accept JitoSOL with the best Liquidity, while Fragmetric accepts a wider variety of Liquidity staking 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 early stage. Therefore, in terms of risk, Renzo and Kyros have the lowest risk, and Fragmetric has slightly higher risk.

2. APY Returns: The APY for each project is expected to be similar, but it can be assumed that the expected APY for Renzo and Kyros may be slightly higher than Fragmetric because they only use JitoSOL, but the difference will not be significant.

3. Airdrop Potential: Given that all VRTs have similar risks and expected returns, the key factor in choosing a specific VRT lies in the potential of Airdrop rewards. Renzo already has Tokens and although staking may earn some future Airdrop points, the potential is relatively low. On the other hand, Kyros and Fragmetric currently do not have Tokens, so the Airdrop potential is higher.

Further analysis of the differences between Kyros and Fragmetric:

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

Kyros's 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; has 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. Firstly, SwissBorg's support makes it easier to distribute $kySOL and opens doors to major partners with Solana. Secondly, Kyros may adopt a fair launch approach. Lastly, Kyros is currently relatively low-key, making its Airdrop potential more appealing.

Of course, this is a personal opinion, for reference only. I hope this analysis can help you make wiser decisions when choosing to stake SOL again.