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Is Sanctum Beneficial to Solana Liquid Staking?

Sanctum, a new player in the liquid staking arena, will launch the CLOUD token on Jul. 8.

Let’s explore what innovations the protocol, one of the Solana projects, brings to the crypto industry.

A Liquidity Pool That Supports Multiple LSTs

The project is in its launch phase, with the main feature being Infinity, the name given to Sanctum’s liquidity pool for liquid staking tokens (LST).

The unique aspect of Infinity is its support for all LSTs from the whitelist, not limited to just 2 or 4 LSTs.

Currently, it is the only liquidity pool supporting such a wide array of LSTs.

This extensive support is enabled by bundling the LSTs with Solana (SOL). For instance, the well-known dog meme coin bonkSOL operates under this system. Each staking account with Sanctum has a locked SOL.

Additionally, Infinity functions as an LST under the INF ticker, allowing it to be used for staking in SOL and exchange pairs.

List of liquid staking tokens of Sanctum. Source: project website

How Does Sanctum Support So Many LSTs?

Sanctum employs an infallible on-chain oracle to define a floor price for all liquid staking tokens, preventing any LST from being priced below this floor.

The floor price is determined by the formula: the ratio of poolTokenSupply (total deposited SOLs) to totalLamports (deposited SOLs and rewards).

This method allows the oracle to calculate the asset price accurately, even in conditions of low liquidity or imbalances.

The formula used to calculate the floor price for LST. Source: project website

Sanctum Pay Debit Card

FP Lee, involved in the development of the project, revealed on Twitter plans to launch a Sanctum Pay debit card.

In collaboration with BasedApp, a company facilitating the use of cryptocurrencies as fiat, that card will convert LSTs into stablecoins like USDC.

However, the launch date for the debit card remains unknown. Crypto debit cards are gaining popularity, with Bybit launching such a card and integrating Apple Pay.

Amresh Poddar

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