SOL-only Strategies
Earn dual yield, while maintaining single-sided exposure to the SOL price
Earn dual yield, while maintaining single-sided exposure to the SOL price
SOL-only vaults consist of tokens that are pegged to the price of SOL. This includes vanilla SOL, and liquid-staked SOL tokens. With these vaults, you earn yield from two sources:
Each of Kamino's vaults deploy liquidity into CLMM DEX pools. By depositing into any of Kamino's vaults, you earn trading fees from volume in the underlying pool. For SOL-only vaults, the fees you earn are typically lower than in mixed vaults, however, you also earn the staking yield on your liquid staking token.
Liquid staking is a way for users to earn yield by staking SOL, without locking their SOL up. In essence, your tokens remain "liquid" for you to use in DeFi. So where does the yield come from? Solana is a proof-of-stake network that relies on validators to keep the network running. These validators require SOL on hand to confirm transactions and secure the network. By staking SOL to a liquid-staking SOL platform (Marinade, Lido, BlazeStake etc), you are providing the validators with the SOL they need.
In return for their service, validators receive SOL, and as a user who owns a liquid-staked SOL token, you receive a portion of that SOL yourself. These earnings are reflected directly in the price of your liquid staking SOL token. So, over time, the value of your token will gradually increase in relation to the SOL price.
is a closer look at how impermanent loss can work in this scenario.