Solayer: Liquid Staking and Restaking on Solana

What Is Solayer?

Solayer is a layer-2 protocol built to make staked SOL more productive. By combining liquid staking and restaking techniques, it aims to boost transaction capacity and unlock liquidity while letting token holders continue to earn rewards. For anyone following Solana scaling or DeFi innovation, Solayer offers a practical way to put staked assets to work.

At its core, Solayer transforms your staked SOL into sSOL, a liquid restaking token that continues to earn yield. Instead of your capital being locked and unproductive, sSOL can be used in other DeFi applications. This dual-purpose approach—earning yield while staying liquid—is designed to make the entire Solana ecosystem more efficient.

How Solayer Works

Solayer operates as a Layer-2 on Solana, using a set of smart contracts to manage the restaking process.

Restaking Pool Manager

The Restaking Pool Manager is a smart contract that supervises pooled SOL. It collects deposits, issues the liquid staking token, and directs where stake is placed. Think of it as the operational hub that keeps the pooled capital moving to the best available staking opportunities.

• Accepts SOL deposits from users
• Mints and distributes sSOL to represent staked positions
• Collects and channels staking rewards to holders

Liquid Staking Tokens

sSOL is Solayer's liquid staking token and represents a claim on staked SOL plus future rewards. Holders can use sSOL in DeFi without waiting for unstaking windows, preserving liquidity while still benefiting from staking yields.

Delegation Manager

The Delegation Manager decides how pooled funds are assigned to validators. It communicates with multiple validators and distributes stake to balance security and reward potential, helping to automate a process that would otherwise require manual coordination.

Reward Accounting Unit

Rather than handling staking directly, the Reward Accounting Unit focuses on accurate bookkeeping. It records rewards generated by the pool and calculates each sSOL holder's share so distributions reflect proportional ownership.

Oracle Price Feeds

Oracles provide external price data that help maintain the exchange relationship between sSOL and SOL. The goal is for one sSOL to approximate one SOL plus accrued rewards, so reliable price feeds are important for market confidence.

A Simple User Journey

A user stakes SOL into the pool and receives sSOL in return. The Restaking Pool Manager deploys the SOL according to the Delegation Manager's plan. Rewards are tracked by the Reward Accounting Unit and allocated to sSOL holders, while oracles keep the sSOL/SOL peg visible to markets.

The Solayer Token Ecosystem

Solayer uses several tokens that serve distinct purposes within its ecosystem:

• SOL: The native asset of the Solana network, used as the base staking and settlement currency.
• LAYER: The protocol utility token used for governance, incentives, and participation in the network economy.
• sSOL: The liquid staking token representing staked SOL, enabling liquidity and ongoing reward accrual.
• AVS tokens: App-specific tokens that let DApps package and distribute SOL yield and extract MEV-related opportunities in controlled ways.
• sUSD: A stablecoin option within the layer-2 ecosystem, intended for transactions and liquidity operations.

Exchange Airdrop and Initial Distribution

To accelerate distribution and awareness, an exchange airdrop allocated 30,000,000 LAYER tokens, equal to 3% of the total supply, to eligible users via a HODLer-style snapshot program. That event increased market visibility and helped bring LAYER into wider trading and DeFi use.

Practical Considerations and Risks

While Solayer adds flexibility, users should understand the trade-offs. Smart contract vulnerabilities, oracle failures, delegation mistakes, or market volatility can affect value and peg stability. Restaking concentrates operational complexity, so assessing counterparty and contract risk is essential before participating.

The Bottom Line

By blending liquid staking with an active restaking approach, Solayer offers a way to make staked SOL more productive and reduce bandwidth pressure on the base layer. Its multi-token design and modular components aim to unlock new DeFi use cases without forcing users to choose between liquidity and staking yields.