Reward-Bearing vs Rebasing Solana Liquid Staking Tokens

What are Liquid Staking Tokens (LSTs)?

Liquid staking is an advanced version of staking. It allows you to stake your tokens and, in return, receive a receipt token representing the staked token plus the rights to any staking rewards. This token is liquid, meaning it can be traded, used in DeFi protocols, or simply held in your wallet while you continue to earn staking rewards.

JitoSOL: A Reward-Bearing LST

JitoSOL is a reward-bearing LST that maintains a constant quantity in your wallet. What sets JitoSOL apart is its dual reward system, accruing both staking and MEV rewards. And as rewards accrue over time the JitoSOL/SOL exchange rate increases as well.

An alternative model: Rebasing LSTs

Rebasing tokens are another type of LSTs that adjust their supply to maintain a stable value. The exchange rate remains the same but the token balance constantly rises in your wallet as staking rewards are accrued over time.   

Why Fewer JitoSOL Tokens? Because it’s reward-bearing!

A common query is why users receive fewer JitoSOL tokens compared to the SOL they stake. Hopefully the explanation of how reward-bearing LSTs accrue value is a helpful clarification.