Introduction
On May 15, 2025, the Phantom PSOL launch redefined the staking experience in the Solana ecosystem. With Phantom Wallet introducing Phantom Staked SOL (PSOL), users can now earn rewards from staking SOL without sacrificing liquidity. This article explores how PSOL works, its benefits, and the broader implications for liquid staking and DeFi adoption on Solana.
What Is PSOL? Understanding Phantom’s Liquid Staking Token
The Basics of Liquid Staking
Traditional staking on proof-of-stake blockchains like Solana requires locking assets to earn rewards. Liquid staking changes that by issuing a derivative token like PSOL that represents the staked asset. This enables users to continue using their capital in DeFi applications while still collecting staking yield.
How PSOL Works
PSOL is a derivative token issued by Phantom Wallet when users stake SOL through their interface. Behind the scenes, Phantom stakes the SOL via validator nodes, while users receive PSOL tokens that can:
- Be traded or used as collateral
- Participate in lending/borrowing protocols
- Generate additional yield through yield farming
This dual-utility approach enhances capital efficiency and encourages broader adoption of staking.
Why PSOL Matters: Benefits for Solana Users
Increased Flexibility for Stakers
Stakers no longer need to choose between earning staking rewards and maintaining liquidity. PSOL lets them do both, unlocking:
- Immediate access to liquidity
- Continued participation in yield-bearing protocols
- Freedom to exit staking positions by swapping PSOL back to SOL
Capital Efficiency in DeFi
By using PSOL in DeFi, users can stake once and multiply earning strategies. Examples include:
- Providing liquidity on Raydium or Orca
- Using PSOL as collateral on Solend
- Engaging in PSOL/USDC yield farms
This integration between staking and decentralized finance boosts ecosystem engagement and encourages longer-term staking behavior.
Strategic Implications for Phantom and Solana
Phantom’s Ecosystem Expansion
Phantom’s decision to launch its own liquid staking solution reflects its ambition to evolve from a simple wallet to a full-stack Solana ecosystem hub. The move:
- Reduces user reliance on third-party staking solutions
- Builds brand trust via native staking integration
- Positions Phantom as a key infrastructure player in Solana DeFi
Strengthening Solana’s Network
Liquid staking supports network decentralization and security by incentivizing more SOL to be staked. Unlike idle capital, staked SOL via PSOL contributes to:
- Higher validator participation
- Stronger network resilience
- Broader user involvement
Which Liquid Staking Token Wins?
While Marinade (mSOL) and Lido (stSOL) have been leading the Solana liquid staking space, PSOL offers a few differentiators:
- Native wallet integration (no external interface needed)
- Immediate staking rewards view inside Phantom
- Strong UI/UX optimization for beginner DeFi users
This streamlined user experience could allow Phantom to capture market share from competitors, especially among new stakers.
| Criteria | PSOL | mSOL | stSOL |
|---|---|---|---|
| Protocol | Likely associated with a newer or less-documented platform (e.g., Parrot, but unclear). Limited information available. | Marinade Finance: Solana’s first liquid staking protocol, launched August 2021. | Lido Finance: Expanded to Solana in September 2021, but discontinued new staking in October 2023. |
| Token Purpose | Represents staked SOL, assumed to be usable in DeFi (similar to other LSTs). | Represents staked SOL, usable in DeFi for lending, yield farming, or liquidity pools. | Represents staked SOL, usable in DeFi, but new staking is halted; existing holders can unstake. |
| APY (Estimated) | No specific APY data found; likely varies by platform (typically 5-8% for Solana LSTs). | ~7.43% (as of June 2024); can increase with DeFi strategies. | ~5.65% (as of April 2022); lower than Marinade, less relevant now. |
| Liquidity | Unclear; likely lower due to limited documentation and market presence. | Very high: ~$645M TVL, 5.18M SOL staked, widely supported on DEXs like Jupiter, Raydium. | Medium: Declining since Lido’s exit; still tradable on DEXs but less liquid. |
| DeFi Integration | Unknown; assumed to support standard Solana DeFi (e.g., Orca, Saber) if active. | Extensive: Used in Kamino, Drift, Solend, Orca for lending, collateral, liquidity pools. | Supported by Serum, Raydium, Saber, but decreasing relevance. |
| Fees | No data available; typically includes staking and unstaking fees for LSTs. | 6% commission on rewards; unstaking fees 0.1%-9% based on liquidity. | 10% fee on rewards, split among operators, treasury, and developers. |
| Risks | Unknown platform risks; likely includes smart contract and de-pegging risks. | Low: Spread across 225 validators, audited contracts; smart contract and de-pegging risks remain. | Higher: Discontinued support, smart contract risks, potential de-pegging. |
| Validator Distribution | No data; likely fewer validators if a smaller protocol. | 225+ validators, enhancing decentralization and reducing slashing risk. | Large validators with separate machines; less decentralized approach. |
| Unstaking Process | Unclear; likely involves swapping or delayed unstaking (2-3 days). | Swap on DEXs or unstake with 2-3 day epoch delay; fees apply for instant unstaking. | Swap on DEXs or unstake with 2-3 day delay; front-end access ended February 2024. |
| Governance | No data on governance or token (if any). | MNDE token for DAO governance; holders vote on protocol decisions. | LDO token for governance; less relevant for Solana post-discontinuation. |
| Additional Benefits | None documented; may offer niche DeFi rewards if active. | MNDE rewards for staking mSOL; campaigns for extra yield. | None currently; focus on unstaking for existing holders. |
Risks and Considerations for PSOL Users
Smart Contract Risks
As with any liquid staking product, PSOL relies on smart contracts that may carry vulnerabilities. Phantom has undergone audits, but:
- Users should exercise caution and research
- Funds could be at risk in case of bugs or validator issues
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Depegging Risk
If demand to redeem PSOL exceeds available SOL, a temporary depeg may occur. This would affect:
- Market value of PSOL
- Redeemability during volatility events
Proper risk management and protocol upgrades are critical to minimizing these concerns.
How to Stake SOL and Receive PSOL
Step-by-Step Guide in Phantom
- Open Phantom Wallet
- Select “Stake SOL” option
- Choose validator or auto-select
- Confirm transaction – receive PSOL
Users can monitor their staking rewards and balance directly from the Phantom interface. PSOL can be sent to DeFi platforms or held in wallet for liquid staking access.
Conclusion: PSOL Signals the Next Phase of Solana Staking
The Phantom PSOL launch isn’t just a new feature it’s a strategic milestone. By enabling liquid staking natively within one of Solana’s most trusted wallets, Phantom is reshaping how users engage with the ecosystem. For SOL holders seeking yield without losing control of their funds, PSOL offers an elegant, efficient solution that blends security, usability, and DeFi opportunity.