There are two main problems facing holders of SOL today.
Firstly, staking is hard. Activating and deactivating stake with a validator takes an epoch. And it’s difficult to transfer stake from one validator to another. Most stakers therefore delegate to one or two validators, which is very risky if that validator underperforms. In the future, your staked $SOL might even get slashed.
Second — even if you do stake, you face a fundamental trade-off between liquidity and returns. While staking $SOL grants you rewards (~7% APY), staked $SOL can’t be traded or transferred. This means that staking inherently locks you out of the DeFi ecosystem.
We’re thus very happy to announce the Socean stake pool, which solves both these problems. The Socean stake pool allows SOL holders to participate in DeFi while earning staking rewards. Depositing SOL instantly gets you SOCN tokens, which are always redeemable for the SOL you put in, plus whatever staking rewards you earned.
Socean monitors and delegates stake dynamically, and handles the re-delegation process in a way that minimises loss of rewards for you. You don’t have to manually switch from validator to validator to maximise your returns — just put your $SOL in, and let us do the work for you.
You can then use SOCN just like $SOL. The SOL-USDC LP is currently ~8% APY. If you instead provided liquidity in a SOCN-USDC pool, you would get both staking AND LP rewards — conceivably doubling your returns. But it’s not just LPs: you’ll be able to use SOCN to borrow, lend, trade, and farm yield, potentially earning even larger rewards.
Fully transparent. We’re 100% transparent. Beware stake pools that hide who they stake with, or don’t disclose their holdings. We’ll NEVER cut backroom deals with validators — we commit to publishing who and how we stake with. In fact, we’re going to build out a powerful, real-time dashboard: for you to monitor exactly who we stake with and where your $SOL is going.
Some stake pools develop in closed-source and in silos. We believe this is dangerous, and damages the ecosystem by fragmenting it. Here, we’ve led by example: we’ve done all our stake pool development on the Solana reference implementation and have flagged out (and fixed) several possible safety violations. You can even compile our program from source and check that it matches exactly with the Foundation’s.
Fair and decentralised. Unlike other stake pools, we do not have a preferred set of validators: any validator can and will be selected by our delegation algorithm as long as it demonstrates good performance. Socean will eventually be fully decentralised: holders of our governance token will be able to vote on the parameters of the algorithm, so depositors and stakeholders — not us — are empowered.
Strong staking strategy. We’ll start off staking in equal proportions to the top-performing 100 validators that are not in either the minimal security group or the minimal data center security group. But that’s just the first step: we’ve used Bayesian statistics and utility theory to derive an optimal (see our technical whitepaper for details) delegation strategy. The strategy will delegate stake to validators in a way that trades off staking rewards and censorship resistance in an optimal manner.
You can start playing with Socean today on testnet (work-in-progress!), and we will release on mainnet beta in the next two weeks. We have a very ambitious and exciting roadmap ahead of us. We have a lot of integrations planned over the next two weeks, with various DeFi players: you’ll be able to unlock the full potential of your SOCN from day 1. In the near future, we plan to introduce a governance token, and transition into a fully autonomous, decentralised stake management system.
We’ve received grants from the Foundation to develop the stake pool ecosystem, and for that we are immensely grateful.