Blockchain is advancing to center stage in the global financial system. As this trend continues, the amount of SOL held in Digital Asset Treasuries (DATs) and Exchange-Traded Funds (ETFs) will scale exponentially.
The question is: what will they do with it?
Holding SOL is only their starting point. To be competitive and attract additional investor capital, these firms need to earn returns on top of their SOL bags and will inevitably make chasing DeFi yields paramount to their SOL/share growth strategies.
Today, we stand at the precipice of billions of fresh dollars flowing into Solana’s top DeFi protocols.
In this blog, we’ll outline why liquid staking tokens (LSTs) are the no-brainer DeFi yield journey entry point for institutional SOL investors, and what makes Sanctum the clear-cut choice destination for getting started.
Why Native Staking Isn’t A Viable Solution
Native staking locks tokens, preventing them from being redeemed or moved until unstaking is complete. For retail users, this limitation is an inconvenience (one we certainly don’t recommend enduring), but for ETFs and DATs, it is a significant structural problem.
These institutions must be prepared to meet redemption requests and operate under strict regulatory frameworks that often require flexible access to capital. If their SOL is locked, their ability to satisfy those obligations is constrained. As a result, every institution holding SOL faces the challenge of how to stake effectively without compromising liquidity.
What’s typically happened up to this point is that, instead of staking aggressively, institutional investors have left a significant portion of their SOL idle. And the SOL that gets allocated to natively stake earns yield at the opportunity cost of deploying into DeFi protocols.
This formula results in lower shareholder value, less security for the Solana network, and underperformance in yield earnings.
Liquid staking fixes all of it.
Institutional-Grade Liquid Staking With Sanctum
By liquid staking, stakers receive an LST, which acts as a transferable receipt of staked SOL with full stake redemption rights. This means institutions can earn staking rewards while retaining liquidity. The LST can be held, traded, and deployed into DeFi protocols.
Standardized LSTs on the market today typically follow a single delegation strategy. While this simplifies operations, it leaves no room for the customization that institutional investors require to fulfill their complex needs.
Institutions such as ETFs and DATs operate under unique rules based on domicile, regulation, and governance structures that demand a more flexible approach. Some institutions may require delegation to specific validators. Others mandate a reserve ratio of unstaked SOL for redemption compliance or need validator infrastructure that aligns with jurisdictional or audit requirements.
To unlock the full value of staking, ETFs and DATs require liquid staking infrastructure that goes beyond standardized models. The answer isn’t simply using an LST; it’s controlling their own.
This is exactly what Sanctum provides its partners.
Our Staking-as-a-Service approach, fine-tuned over years of work with leading crypto-native businesses like Jupiter (JupSOL, 5.5 million+ SOL staked) and Bybit (bbSOL, 2 million+ SOL staked), now appears as if it were purpose-built all along for ETFs and DATs like our partner DeFi Dev Corp (dfdvSOL, 350k+ SOL staked).
With it, institutions gain full authority over how their SOL is staked and represented. They can design strategies around their mandates with precision, supported by infrastructure flexible enough to adapt to regulatory requirements and robust enough to scale with their holdings. For those looking to expand beyond LST staking yield alone, every LST is fully ready for DeFi deployment and integrations.
Sanctum’s approach ensures that institutional holders aren’t boxed into a one-size-fits-all strategy. They get exactly the structure they need, backed by the most advanced liquid staking infrastructure on Solana.
This framework translates into a set of capabilities designed specifically for institutions:
Custom Delegation Strategies
Institutions aren’t confined to one validator set or allocation. With Sanctum, they can delegate SOL in any proportions to any validators they choose. Whether regulations require spreading stake across specific nodes or concentrating it within certain domiciles, we make it possible.
Bespoke Technical LST Design
Launching new LSTs on Sanctum comes with a near-zero marginal cost, enabling partners to define their own rules, like implementing permissioned deposit and withdrawal guards and using custom reserve ratios of staked to unstaked SOL, among many other options.
Custom-Branded LSTs
Each partner receives a branded LST, controlled entirely by the institution. ETFs and DATs then leverage the token to expand their brand presence into the broader market.
The Institutional LST Layer For Solana
As Solana-focused institutions continue to scale their holdings, Sanctum provides the only liquid staking infrastructure that can meet all of their needs.
With full customization and true ownership of their LSTs, we give institutions the ability to maximize yield while retaining the flexibility their operations demand to maintain compliance.
For Solana to serve as the backbone of a global financial system, its largest holders must be able to participate fully in staking and across DeFi protocols. Sanctum is the LST operating system that makes it possible.