Liquidity

Liquidity is the most important factor for the adoption of any asset. Conversion delay and slippage are two key considerations.

In an ideal world, there would be no slippage and instant conversion, so all Solana users should hold yield-bearing LSTs instead of SOL.

What prevents this from happening is the liquidity of such LSTs. Each LST needs to have a deep pool with low swap fees and a significant amount of trading volume to offset LP’s capital costs.

To address this problem, Solayer introduces Superior Liquidity for AVS Tokens using a pooled liquidity design. Solayer AVS LST Tokens can be instantly unwrapped (or undelegated) back to the underlying representation, sSOL.

Unlike others that use a multi-LST pool, where the liquidity for each LST depends on their LP pools (a less efficient design), Solayer consolidates all liquidity for Solayer AVS Tokens using the sSOL-SOL pair.

This strategy results in significantly smaller price impact and significantly improved liquidity.