Editor's Note: This article introduces Jito Labs' (Re)staking protocol on Solana, which allows users to earn higher returns by using already staked SOL assets and potentially participate in Airdrops. Users can (re)stake SOL through three providers, Renzo, Fragmetric, and Kyros, each with different risks, liquidity, and potential returns. The article provides a detailed comparison of their features and recommends choosing Kyros, which supports a fair launch and potential Airdrop rewards.

The following is the original content (slightly edited for ease of understanding):

After successfully building the largest liquidity stake protocol on Solana, Jito Labs is bringing another important development: the launch of a new stake protocol - Jito Re-stake. This re-stake project is now live today and will soon open for deposits, with an initial re-stake limit of about 25 million USD (147,000 SOL). For those who want to earn higher SOL annualized returns and are looking to participate in Airdrop opportunities ahead of time, this is a very attractive opportunity in the current market.

Before introducing how to maximize the use of this opportunity, let's briefly review the basic principles of Jito and stake.

What is Jito restake

Simply put, re-stake refers to using assets that have already been staked to provide security for a specific Decentralization service again. Although it may seem unimportant, it is actually one of the most promising innovations in this cycle. The concept was pioneered by EigenLayer and first launched on the ETH mainnet in June 2023.

Example explanation of the actual operation of 01928374656574839201

Today, Jito finally brings this new technology to Solana through its stake program.

Jito diagram of each component stake

Core components of Jito's stake framework

The Jito re-stake framework consists of two main components: the re-stake program and the treasury program. They can be seen as two independent entities that work together to provide a flexible and scalable infrastructure for creating and managing stake assets, treasury receipt tokens (VRT), and NodeConsensus operators (NCN). VRT is the term Jito uses for the liquid re-stake tokens, while NCN is similar to the active validation service in EigenLayer and represents entities that will utilize the Jito re-stake solution.

The main function of the stake program is to manage the creation of NodeConsensus operators (NCN), the user selection mechanism, and the reward distribution and punishment mechanism. This part is not visible to users and can be regarded as the core support of Jito's stake solution.

The Treasury program is responsible for managing the flow of stakeToken (VRT) and customizing different stake strategies through DAO or automated protocols. This is the main interface for users to participate in stake. It can be likened to the role of stake program in Solana by EigenLayer, while the Treasury program is similar to EtherFi, acting as a liquidity layer between users and the core stake protocol.

Vault program how the image works

3 VRT providers

In the early stages, Jito only cooperated with three VRT providers: RenzoProtocol ($ezSOL), fragmetric ($fragSOL), and KyrosFi ($kySOL), which will collectively allocate an initial cap of 147,000 SOL. Therefore, any user who wishes to stake SOL through Jito needs to choose from these three VRT providers.

Image of Jito (Re)staking login page

The following is a brief summary of the main features of each VRT provider:

How to choose the right VRT for SOL re-stake?

The key is to find the best risk-reward ratio when choosing which VRT to invest in.

The following is the analysis of each provider:

1. Risk: In terms of risk, the main penalties are follow protocol (i.e. penalty risk) and Liquidity risk. Due to the current low number of NCN and its early stage, it can be considered that the risks of all providers are basically the same. Renzo and Kyros accept JitoSOL with the best Liquidity, while Fragmetric accepts a greater variety of Liquidity-staked Tokens (LST), which may increase its Liquidity risk. In addition, Renzo and Kyros' VRT will have Liquidity from the beginning, while Fragmetric's Tokens are not transferable in the initial stage. Therefore, in terms of risk, Renzo and Kyros have the lowest risk, and Fragmetric has slightly higher risk.

2. APY Returns: The expected APY for each project is similar, but Renzo and Kyros, which only use JitoSOL, can be expected to have a slightly higher APY than Fragmetric, but the difference will not be significant.

3. Airdrop Potential: Given that all VRTs have similar risks and expected returns, the key factor in choosing a specific VRT lies in the potential of Airdrop rewards. Renzo already has REN tokens, and although staking might earn some future Airdrop points, the potential is relatively low. Kyros and Fragmetric currently have no tokens, so the potential for Airdrop is higher.

Further analysis of the differences between Kyros and Fragmetric:

Features of Fragmetric: Expected to receive venture capital support, may follow a high FDV, low circulation model; biased towards technical and Decentralization user groups; cooperating with Risk Management company Gauntlet; Tokens are not transferable in the initial stage; accept a variety of LST.

Kyros Features: Supported by SwissBorg to help distribute $kySOL and potentially collaborate with major players in Solana; May raise funds through a fair community-driven token model; Not yet widely promoted; NCN distribution method may be based on DAO voting; Supports JitoSOL.

Overall, KyrosFi is more attractive in several aspects. First, the support from SwissBorg makes it easier to distribute $kySOL and opens doors for its major partnership with Solana. Second, Kyros may take a fair launch approach. Finally, Kyros is currently relatively low-key, making its Airdrop return potential more appealing.

Of course, this is a personal opinion and is for reference only. I hope this analysis can help you make wiser decisions when choosing to stake SOL again.

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