Our Vision For Infinity: SOL Liquidity For All Solana LSTs

As Infinity (INF) has grown its AUM from around $70 million in April to over $300 million today, we’ve done a lot of shouting about its yield performance. How it compares to other SOL yield options, where the yield comes from, yield amplification opportunities like Jupiter Lend, and, overall, why INF is the best place to grow your SOL.

But despite what all that performance and shouting would indicate, INF’s primary purpose is not actually to maximize APY. The truth is, INF’s primary purpose is to be a deep liquidity source for our liquid staking partners’ LSTs. High APY is both the tool required and a byproduct of its primary purpose.

In this blog, that’s exactly what we’ll dive into. INF’s purpose as a liquidity provider for LSTs, how it operates under the hood to serve that purpose, and how we envision it developing long-term.

Liquidity is one of the most vital parts to get right when launching and maintaining an LST. When we say liquidity in this context, we mean the ability for anyone to seamlessly swap their SOL to an LST, and vice versa, with minimal friction and cost.

This gives holders the confidence to enter and exit positions and keeps LST prices stable. Without it, swaps fail, redemptions stall, slippage spikes, and user confidence wavers.

As we’ve highlighted before in our content, building deep, efficient SOL liquidity is quite difficult. In the old days, each team would need to bootstrap and manage its own liquidity for its LST, which carries substantial operational, financial, and opportunity costs, forcing teams to divert time and capital resources away from their core products. Before we created Infinity and our core LST infrastructure to solve this problem, you could count the number of Solana LSTs on one hand.

→ Learn about the pains of LST liquidity

Infinity eases the liquidity burden for everyone. With it, LSTs can draw liquidity from a shared liquidity pool (aka, unified liquidity layer) that ensures their users have access to SOL liquidity. In that sense, Infinity is a systemic stabilizer, making the entire LST ecosystem more resilient, efficient, and liquid. Establishing this shared liquidity lowered the barrier to entry for creating an LST to near-zero, making an ”infinite LST future” actually possible for Solana. Without Sanctum, there would not be over a thousand branded LSTs on Solana today.

Every epoch (approximately 2 days), INF strategically unstakes SOL to maintain a liquidity reserve, which acts as the first line of defense for Solana LSTs and their users.

Here’s what INF unlocks:

• When someone wants to swap one LST for another, INF allows them to deposit their current LST to withdraw the one they do - minus a small fee.
• Similarly, if someone wants to swap one of their LSTs for unstaked SOL, INF accepts their LST as a deposit and gives them unstaked SOL in return. Minus a small fee, of course.

In practice, this means that every epoch, INF makes available anywhere from 50,000 SOL to 200,000 SOL - or more - to meet market demand. When swaps occur through INF, it benefits INF holders, who earn additional APY from trading fees, and the entire network of LSTs benefit whose users depend on reliable access to near instant LST to SOL redemptions.

Importantly, as INF grows larger, the amount of SOL it can unlock in reserve to facilitate these swaps each epoch also grows. Meaning the larger INF is, the more liquidity it can provide to the LST market.

This function becomes critical during periods of market stress, when demand for unstaked SOL spikes as users unwind positions or exit leverage. In those moments, INF absorbs short-term market shocks by providing as much SOL liquidity as it can to the market to meet withdrawals, and therefore helps prevent LSTs from depegging, maintaining user confidence in our partners and their LSTs.

What’s more, INF’s APY spikes higher as it earns fees for providing that liquidity and facilitating those swaps - earning outsized returns for INF holders.

The October 10 flash crash, in which a record-breaking $19.5 billion in market liquidations occurred, was a prime example of how INF outperforms and plays a critical role in the Solana ecosystem when the markets are stress-tested.

→ Learn about INF’s October 10th performance

Every epoch, INF unlocks SOL that enables most of our partners’ LSTs to exist. And as those LSTs continue to expand, their liquidity demands expand in tandem. The same applies to non-partner LSTs that rely on INF to sustain and expand operations.

If INF’s AUM growth doesn’t adequately match the growth of LSTs, it becomes less efficient at servicing liquidity demands. Therefore, it’s our role at Sanctum to expand INF to preserve the optimal liquidity level that enables our partners and the broader Solana LST ecosystem to continue growing.

At the center of this is INF’s reserve. The reserve is essential for enabling instant swaps, but it also introduces what we call ‘SOL drag’.

Because reserve SOL is unstaked, if there is no demand to swap for this SOL, it earns INF holders 0% yield, which lowers INF’s overall APY compared to fully staked SOL. The smaller INF’s total AUM, the higher the share of idle SOL, and the heavier the drag.

Since the reserve SOL is not staked, it earns 0% yield if there isn’t demand from users to swap for this SOL, which can lower INF’s overall APY compared to the yield of fully staked SOL. The smaller INF’s total AUM, the higher the percentage of idle SOL, and the heavier the drag.

Here’s what that looks like in practice:

As deposits grow, the relative size of the reserve shrinks, meaning more of INF’s capital is actively earning yield. This improves the effective APY and strengthens INF’s role as a high-efficiency liquidity layer, all without changing its underlying yield sources or risk profile.

If INF’s AUM stagnates, the 600k SOL reserve becomes an anchor on performance. Yield looks low, deposit growth slows, and the liquidity that partner LSTs depend on begins to thin. But if AUM continues to grow to the right scale, INF remains capital-efficient and yield-competitive, sustaining deep liquidity across the entire ecosystem.

That’s why INF growth matters.

As the value of the Solana network grows, more SOL enters staking each epoch. Turning as much of that staked SOL as possible into liquid staking is positive-sum for every Solana ecosystem participant, increasing the network’s capital efficiency and overall liquidity.

Today, roughly 14% of all SOL is liquid-staked, up from 3% in mid-2024. We believe that number should be as close to 100% as possible, and INF is the primary mechanism that enables progress toward that mission.

As the LST expansion furthers, the need for deep, reliable SOL liquidity will rise as well. Our vision for Infinity is to meet that demand at scale. We want INF to become large enough that, within each epoch, there is sufficient SOL liquidity to support every LST on Solana in all market conditions.

Realizing this vision means INF becomes a fundamental part of Solana’s financial infrastructure. That is the future we are building toward. An ecosystem where real yield and real liquidity work in harmony, powered by Infinity.