What is Sanctum: simplifying liquid staking and enhancing liquidity on Solana

Sanctum is a platform for staking and trading on the Solana network. With Sanctum, you can convert your traditional stake accounts into liquid staking tokens (LSTs), providing instant liquidity and unified staking rewards without lock-up periods.

The platform helps to address the challenge of liquidity fragmentation when staking on Solana, which can cause volatility and inefficient market making when staking. Fragmented liquidity can also lead to staking rewards being distributed inefficiently. Sanctum offers an answer by aggregating liquidity from different staking LST pools, giving users access to deeper liquidity.

In this article we'll explore Sanctum in depth, explaining the platform's key features and how it can support your staking strategies.

TL;DR

• Sanctum converts traditional stake accounts into LSTs for instant liquidity and rewards. In this way, the platform helps to address the challenge of fragmented liquidity when staking on Solana.

• With Sanctum Infinity, users can deposit LSTs or SOL into a shared pool and potentially earn INF tokens consistently.

• Sanctum Infinity is a multi-LST liquidity pool, and differs from other liquidity pools because it gives access to millions of tokens, where others give access to just a few.

• Sanctum's trading platform lets you easily swap LSTs and SOL, making asset management more efficient.

• Sanctum Wonderland brings an interactive element to earning rewards by granting users points and rewards for using the platform and completing specific tasks.

How can you use Sanctum's Infinity pool to manage liquidity?

Sanctum's Infinity pool is a way to manage liquidity on the Solana blockchain. It uses a multi-LST liquidity pool to simplify staking and liquidity processes for users. What's more, the platform aggregates liquidity from across multiple LST pools to provide deep liquidity to users. But how does it work, and why is it a game-changer for those involved in staking?

Traditional staking locks up assets, limiting your access to them. Sanctum addresses this by allowing you to deposit any approved LSTs or SOL into a liquidity pool and receive INF tokens in return. Holding INF tokens allows you to unlock the system's benefits.

Think of Sanctum as a community fund where everyone can deposit different kinds of resources (LSTs or SOL). You'll receive a share of the fund represented by the INF token in exchange for your contribution. This token represents your claim to a piece of the pooled resources and any earnings generated from those resources.

The INF token represents your stake in the pool and your holdings can increase in value through two main sources: staking rewards and trading fees. Rewards come from staking within the pool, while trading fees are earned when you trade the pool's LSTs. This design allows you to potentially generate consistent earnings without needing to actively manage your assets.

For more detailed insights on how Sanctum can enhance your liquidity management, you can refer to Sanctum's Guide on Infinity and explore the broader benefits of multi-LST pools.

The basics: trading LSTs on Sanctum

When you trade LSTs on Sanctum, you can apply your staking assets to potentially generate additional gains. Here are the fundamental steps you should know.

Understand the basics

Sanctum's Trade feature makes buying and selling LSTs simple. Think of it as a marketplace where you can swap your LSTs for other LSTs, or for Solana (SOL). This instant swap mechanism allows for quick adjustments in your staking portfolio, enhancing your ability to optimize staking positions based on market conditions.

Start a trade

To start trading, navigate to the "trade section" on the Sanctum platform. Here, you'll see a list of available LSTs and their current exchange rates.

For example, if you have jucySOL and want to switch to bonkSOL, you can easily swap them. Choose the LST you want to trade, enter the amount, and confirm the transaction.

Swap LSTs

Sanctum’s platform supports SOL swap and LST-to-LST trades. This means you can convert your SOL directly into any available LST or switch between LSTs without first converting back to SOL. This feature makes it easier to manage your staking assets.

Benefits of trading on Sanctum

One advantage of trading on Sanctum is the ability to react instantly to changes with staking. Whether you’re looking to capitalize on higher yields from a different LST or need to rebalance your portfolio, the platform’s buy and sell functionality allows you to do so without delays.

Meanwhile, Sanctum uses Solana's high-speed blockchain technology to bring security and efficiency to transactions. The network also allows you to access low transaction fees and near-instant confirmation times, making the trading experience smooth and user-friendly. It also reduces friction compared to traditional staking models.

How do you convert and manage stake accounts with Sanctum?

The ability to convert and manage stake accounts are key features of the Sanctum platform. Let's look now at how to achieve both.

Converting stake accounts

To convert stake accounts, log into the Sanctum platform and go to the "Stake Accounts" section. Here you'll see your stake accounts, each representing staked SOL with specific validators.

Select the account you wish to convert and choose the LST you want in exchange. Sanctum lets you swap your stake account for an LST immediately, so you can use your staked assets more flexibly, without the usual waiting period.

Managing your LSTs

Once your stake account is converted into an LST, you can manage your assets. You can view your LSTs directly in your Sanctum dashboard, where it's possible to monitor their performance, track staking yields, and make further trades as needed. This unified approach simplifies staking, letting you focus on returns rather than managing multiple accounts.

Benefits of converting to LSTs

Converting your stake account to LSTs offers instant liquidity. It also makes staking efforts more manageable. This flexibility is key in modern staking strategies. Market conditions change quickly, and having liquid assets can give a strategic advantage.

How do Sanctum's liquid staking tokens benefit me?

Sanctum’s LST platform provides immediate liquidity while still delivering staking rewards. This dual benefit is helpful for those seeking both flexibility and the opportunity for gains from their staking strategies.

The liquid advantage

With liquid staking, your staked tokens remain accessible. They're converted into LSTs, which you can trade, use, or stake further. For example, traditional staking locks up your SOL until a set period ends. With Sanctum's LSTs, you can instantly trade or swap your staked SOL for a liquid token. This way, you can quickly react to market opportunities without missing out on staking rewards.

Tailored for flexibility

Sanctum offers various validator LSTs, each tailored to different staking validators and user needs. You can choose LSTs based on your preferred validators or performance metrics, giving you more options to execute your staking strategy while managing risk.

Unified rewards and enhanced returns

Another advantage is the simple way you can potentially earn staking rewards with LST. On the platform, you don't need to track multiple staking accounts as your LSTs automatically earn rewards from their validators. This makes it simple to track and grow your earnings.

Strategic benefits

Sanctum's LSTs offer immediate liquidity, flexibility, and simplified reward management. That means you can optimize returns while avoiding the conventional limitations of staking.

What is the Sanctum Wonderland and how can you participate?

Sanctum Wonderland is a gamified engagement platform designed to boost user interaction and participation within the Sanctum ecosystem. It's a virtual playground where your involvement earns you experience points (EXP) and various rewards.

Understanding Sanctum Wonderland

Sanctum Wonderland adds a layer of fun and incentivization to your experience on the Sanctum platform. Here, every action earns you points, and these points can be exchanged for rewards. For instance, you can earn points every time you make a trade or participate in a community discussion, much like a loyalty program at a coffee shop where each purchase brings you closer to a free drink. In Sanctum Wonderland, your daily tasks level you up, unlocking new rewards and benefits.

How to participate in Sanctum Wonderland

Here's how to get started with Sanctum Wonderland.

• Sign up: First, connect your Solana wallet to the Sanctum platform. When you open the app, you'll see a prompt inviting you to join Sanctum Wonderland. To enroll, simply follow the instructions that appear on your screen.

• Engage and earn: Upon enrollment, actively engage in the diverse tasks and events offered on the platform. Activities may include staking, trading, or participating in discussions. Each action contributes to your EXP accumulation.

• Redeem rewards: As you accumulate EXP, you can redeem them for various rewards. This might include fee discounts, access to special platform features, or exclusive community badges.

The Sanctum Wonderland can make platform interactions more rewarding by offering a structured way to earn benefits from regular participation. The more you engage, the more you earn, turning daily activities into rewarding opportunities.

The Sanctum Wonderland community and rewards

Participating in community events is a fundamental aspect of Sanctum Wonderland. These events can range from referral contests to interactive quests. Each event is carefully designed to foster community bonding and offers additional opportunities to earn EXP. For example, a referral program might offer extra EXP for bringing new users to the platform. These elements create a collaborative environment where users contribute and gain from the community's growth.

The final word

The Sanctum platform offers different opportunities for Solana staking and trading by converting stake accounts into LSTs. Through this conversion, you can access instant liquidity and unified staking rewards. There are no lock-up periods, and the ecosystem lets you quickly adapt to market changes while still earning rewards. Meanwhile, by aggregating liquidity from different LST pools, the platform helps to address the challenge of fragmented liquidity encountered when staking on Solana.

Built on the Solana blockchain, Sanctum benefits from the network's high-performance and low fees. And, with features such as Solana Wonderland offering additional reward opportunities that encourage community participation, Sanctum provides a social element.

Interested in finding out what else is possible on the Solana network? See our guide to SPL-20 inscriptions, which allows digital art and NFTs to be embedded directly on the blockchain.