What are Liquidity Staking Protocols?

Liquidity Staking Protocols facilitate the Staking Activity in the network, and BlazeStake is one of them.

When you stake with BlazeStake, the stake pool spreads your stake across hundreds (and in the future, thousands) of both high-performing validators and smaller validators, which greatly increases the security of the Solana blockchain while optimizing your rewards. (Source)

This Project launched in Solana on May 2022, and their liquidity staking derivative (LSD) token is the $bSOL.

$bSOL automatically increases in value relative to SOL as staking rewards accrue. You can use bSOL tokens in a variety of DeFi applications to further increase your staking rewards. (Source)

On July 2023 BlazeStake announced their Airdrop

With an increase in their social media activity, it didn't take long for their announcement to reach new users, and achieve a considerable amount of records in less than 1 month.

A lot of new users started to arrive into this project, stake their $SOL and proceed to provide liquidity with them into different DeFi Protocols because it improves the amount of airdrop earned.

One of these DeFi Protocols that received a lot of attention was MarginFI, as on July 10th added $bSOL as an option to lend, and in less than 1 day, the maximum cap was achieved and $bSOL pool was included in the global pools (with the feature to use that asset as collateral to borrow) and increasing their limit cap on three different occasions because users keep reaching the limit within hours after increasing the cap.

So let's take a look into the activity of this protocol and their LSD token since July 2023, and the activity of $bSOL lenders in MarginFI.

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