<aside> 🎯 Socean Stake is a stake pool for the Solana blockchain.
Socean Stake unlocks your SOL, earning you staking rewards while allowing you to participate in DeFi.
Our goal for Socean Stake is to give you the best risk-free yields on Solana.
Solana is a proof-of-stake blockchain where you can earn rewards by staking your SOL tokens. By staking your SOL tokens, you help secure the network and earn rewards while doing so (see Solana documentation). Everyone who holds SOL should stake SOL.
There are two main problems with staking SOL.
Firstly, SOL holders face a fundamental trade-off between liquidity and returns. While staking SOL secures the network and grants staking rewards (~7% APY), staked SOL can’t be traded or transferred. This means that SOL holders must choose between locking up their SOL to earn staking APY, or holding unstaked SOL (giving up the staking rewards) in order to participate in the DeFi ecosystem (borrowing, trading, providing liquidity, yield farming etc).
Secondly, the UX of staking SOL is very poor. Staking normally to a validator takes up to three days to activate your stake, and three days to deactivate it. As a result, most SOL holders choose to delegate to only one or two validators. Many stakers will choose to just delegate with validators with a large amount of stake. But this is suboptimal for both network health and APY (high variance if one’s chosen validator underperforms).
The Socean stake pool solves both of these problems. Users can deposit SOL to receive scnSOL tokens, which represent that user’s ownership of the stake pool. We take that SOL and delegate it to validators using an algorithmic delegation strategy which maximises expected returns and minimises variance.
As scnSOL tokens are transferable and tradeable, they can be used in DeFi for utility and extra returns. For example, the scnSOL tokens can be used to provide liquidity in pools like Orca or Saber or as collateral via Solend for borrowing/margin trading. Users can swap scnSOL for SOL instantly via liquidity pools. As scnSOL tokens can always be redeemed for the SOL one put in there is no risk of losing one’s initial capital. In the worst case, scnSOL tokens are no less liquid than SOL staked to a validator.
We charge a one-time withdrawal fee (0.06% of transaction size) and an ongoing management fee (~2.0% of staking rewards).
Socean uses a transparent and principled delegation strategy. We delegate to validators that demonstrate good long-term performance, are decentralized (geographically and by data center), and are not part of the minimum security group.
We combine analysis of validator performance with financial and economic theory (mean-variance analysis, expected utility theory) to maximise APY, minimise rewards variance, and improve network health. For more details, have a look at the validator whitepaper.