Thomas Daniels
Liquid staking protocol Jito and restaking platform Fragmetric have introduced a pioneering liquid restaking token on the Solana blockchain, known as fragSOL. Announced in a blog post on August 29, fragSOL marks the first liquid restaking token native to Solana. It is based on the Jito restaking vault receipt token.
FragSOL is designed to tackle common issues in liquid staking, such as reward distribution and slashing. This functionality is enabled by Solana’s advanced blockchain capabilities, according to the platform’s statement.
Understanding Liquid Restaking Tokens
Liquid Restaking Tokens (LRTs) are an innovative addition to the liquid staking market. They enable decentralized finance participants to earn from both their staked tokens and Actively Validated Services (AVS) rewards. Typically, users deposit tokens like SOL into a liquid restaking protocol to receive a liquid staked token, which can be reused to support actively validated services, thereby earning additional yield. However, many LRT protocols face challenges in effectively managing AVS rewards.
Fragmetric’s fragSOL token aims to overcome these challenges by leveraging Jito’s restaking framework and Solana’s token extension. This integration allows fragSOL to enhance the liquidity and composability of staked Solana tokens while optimizing yield.
How fragSOL Operates
While Ethereum-based liquid restaking protocols struggle with AVS reward distribution, fragSOL utilizes Solana’s transfer hook feature to manage these complexities. This feature ensures accurate allocation of node consensus network (NCN) rewards based on the duration of LRT holdings.
“When Alice transfers $fragSOL to Bob, the $fragSOL transfer hook is activated, updating their $fragSOL balances in Fragmetric’s Rewards Module,” explained Fragmetric. “Upon receiving NCN rewards in Fragmetric’s vault, the reward module records the time-based balance, enabling users to claim their respective rewards. This approach ensures that $fragSOL accurately calculates and distributes NCN rewards to all users.”
The launch of fragSOL follows closely on the heels of Renzo’s release of the liquid restaking token ezSOL, also on Jito. Additionally, Renzo offers ezETH on EigenLayer and pzETH on Symbiotic, further expanding the LRT ecosystem.
