Sanctum's Strategic Rise in the Solana Liquidity Staking Token Ecosystem

Sanctum, one of the foremost names in the Solana Liquidity Staking Token (LST) sector, has solidified its position as the 18th largest protocol globally in the cryptocurrency space. During KBW2025, James Hanley, Chief Strategy Officer of Sanctum, shared pivotal insights into the company's growth trajectory, its innovative partner-centric approach, and its bold ambitions in the Korean market during an exclusive interview with Blockmedia on September 24.

Market Position: Establishing Authority in Solana's Staking Ecosystem

Sanctum has emerged as a pivotal player within the Solana ecosystem, ranking 3rd or 4th among Solana protocols. Hanley outlined its operational focus, stating, "We specialize in Liquidity Staking Tokens (LSTs), managing all aspects of Solana staking liquidity." This niche specialization, coupled with cutting-edge solutions, has sparked its rapid ascent and established its authority within decentralized finance (DeFi).

Key Growth Drivers: Partner-Branded LSTs Take Center Stage

One of the most striking aspects of Sanctum’s success lies in its unique partnership-driven model. Contrary to conventional strategies, only 10% of its growth can be attributed to its proprietary LST, Infinity(INF). Hanley revealed that 90% of its performance stems from branded LSTs developed for partners, such as Jupiter’s JupSOL and Drift’s DriftSOL.

These partner-branded tokens empower collaborators by enabling greater yield opportunities for users and unlocking fresh revenue streams. Partner validators also benefit from larger delegated stakes, which improve transaction efficiency across Solana’s network. Sanctum's infrastructure plays a critical role in maintaining operational stability while scaling these branded solutions.

Infinity(INF) complements this ecosystem by functioning as a liquidity bridge, seamlessly connecting and facilitating exchanges for partner LSTs while enhancing their utility within Solana’s DeFi frameworks.

The Fundamentals of Liquidity Staking Tokens (LSTs)

While staking is widely recognized among Korean investors, the concept of LSTs remains underexplored. Hanley demystified their importance: “When SOL tokens are staked, they earn rewards but remain locked, preventing their use in other DeFi activities. LSTs solve this by offering a liquid representation of staked assets.”

These liquid tokens enable users to simultaneously earn staking rewards and engage in DeFi protocols such as Kmno or Jup Lend to secure additional yield or collateralized loans. Essentially, LSTs unlock liquidity from traditionally illiquid assets and inject it back into DeFi markets, creating amplified value for both users and the broader ecosystem.

Redefining Solana’s DeFi: Shared Infrastructure at Zero Cost

Launching and maintaining LSTs was historically cost-intensive, often limiting participation. Sanctum has disrupted this paradigm by introducing infrastructure solutions that drastically reduce expenses for partner LST creators. Hanley commented, “Partners can now launch their LSTs at virtually zero cost.”

Sanctum’s shared liquidity infrastructure mitigates operational burdens, allowing partners to scale their offerings with ease. In addition, its Stake Weighted Quality of Service (swQoS) mechanism improves transaction prioritization during network congestion, rewarding validators with larger stakes through enhanced user experiences. By helping partners like Jupiter achieve operational efficiency, Sanctum reinforces the overall strength and stability of Solana’s DeFi ecosystem.

Unique Positioning Amid Competitive Forces

Competition in the Solana staking space is fierce, with notable players like Jito and Marinade offering proprietary tokens such as JitoSOL and mSOL. Hanley highlighted Sanctum’s differentiation strategy: “We are not trying to outcompete on singular LSTs. Instead, our focus is on empowering partners to create competitive, high-performing branded LSTs.”

By dedicating 90% of its efforts to enabling partner success through customized staking infrastructure, Sanctum distinguishes itself as a collaborator rather than a market competitor. This approach amplifies innovation across its ecosystem, driving mutual growth and differentiation.

Liquidity Staking: A High-Potential Market

The LST market on Solana is burgeoning, with significant room for expansion. Hanley shared compelling data underscoring its growth trajectory: “Two years ago, only 2.5% of staked SOL was locked in LSTs. Three months ago, this figure grew to 13%, and today it stands at 14.5%. That still leaves over 85% of staked SOL untapped for LSTs, presenting immense opportunities.”

Despite substantial growth, the untapped potential provides fertile ground for Sanctum and its partners to further educate users and expand adoption, ensuring sustained growth within this promising sector.

Future Innovations: Staking-as-a-Service and Beyond

While LSTs remain core to Sanctum’s operations, the company is actively diversifying into staking-as-a-service. Hanley revealed a growing focus on collaboration with digital asset custodians (DATs), working together on LST development, validator management, and staking infrastructures. One notable partnership involves DeFi Dev Corp, the largest Solana-based DAT in the U.S., for whom Sanctum manages core staking operations.

Beyond staking, Sanctum is venturing deeper into transaction optimization. Its acquisition of Iron Forge paved the way for Gateway, a new product designed to enhance Solana transaction flows. This innovation is already gaining traction with leading developer teams on the network, reshaping operational efficiency.

Focus on Korean Expansion

Korea has emerged as a strategic market in Sanctum’s growth plans. Hanley confirmed upcoming partnerships with local custodians to extend LST operations in the region. He linked this expansion to DeFi Dev Corp’s anticipated entry into Korea, signaling strong alignment on strategic priorities. “We are excited to announce this move during KBW2025 and look forward to deepening our footprint in this dynamic market,” he shared.

Conclusion: Pioneering Staking and Liquidity Solutions

Sanctum’s meteoric rise is anchored in its innovative partnership model, robust staking infrastructure, and strategic market expansions. With its continued push to redefine the LST sector and broaden its impact through staking-as-a-service and transaction optimization, Sanctum is poised to play a pivotal role in shaping the future of cryptocurrency staking and liquidity on Solana—and beyond.