we could be bigger than lido.

we have a secret.

Part of building a startup is finding a secret that no one else knows. In crypto, I’ve seen/ that for founders who are new to crypto, it usually takes at least 1–2 years to “find that secret”.

Why does it take so long? Well, I suspect it’s because crypto is so counter-intuitive and so different from Web2 or TradFi, where most founders come from. Way too often, founders give up on crypto in less than 1–2 years, right before that critical juncture.

(from # Hard Pivot from Crypto)

i have been building liquid staking on Solana since February 2021. It took us about a year and a half to find the secret that became sanctum.

the secret is that LSTs are fungible. they're not really different assets, they're just wrappers over the same stake accounts. the corollary is that i) the moat for a stake pool is minimal, and ii) you should be building for a multi-LST future.

folks kind of knew this? but they didn't embrace this fact. they wanted to be the top dog, to play the liquidity moat, to crush their competition. we faced this fact early and thought hard about building something that'd take advantage of this underlying fungibility, to build a 100x better liquid staking landscape than ethereum.

lido is the massive incumbent that everyone wants to topple. they have a pvp moat, which means they're constantly fighting to defend themselves, and also means there's a cap on how big they can get, before someone hungrier eats them up.

this isn't a game i want to play. i saw this game being played between Marinade and Lido when we were Socean, a bit akin to the web2 wars between Uber and Grab. web3 should not be played this way -- we should absolutely be focused on growing the pie. dude, there's 95% of staked SOL still up for grabs.

our genesis promise, our number one objective, is to make all SOL liquid. but trying to do it with one stake pool is idiotic.

i have very early drafts of "omniswap" and "iSOL" and "omniSOL" dating all the way back to april 2022. iSOL would become infSOL and omniswap would become the sanctum reserve pool. but the goal has always been the same: to let anyone spin up an LST, and to build common supporting infrastructure for those LSTs. let a hundred flowers bloom, capture 100% of the pie.

what we have this time with Sanctum feels different. we have a moat, but it's a pve moat, not a pvp moat. it feels good. everyone wants us to succeed, and we want everyone else to succeed.

the stake pools want us to succeed and grow the reserve pool. DeFi protocols love the liquidity we provide. Solflare loves that they can make extra money helping users instant unstake their SOL. jupiter loves our sanctum router because users can stake with zero fees. the validators love the idea that we're setting up new LSTs for them and helping their stakers get the best of both worlds. we're working with everybody, not against them.

in the past, when we built yet another stake pool, every SOL that goes to marinade/lido was 1 SOL that didn't come to us. validators didn't like stake pools very much for obvious reasons. this has completely changed. we want stake pools to grow as much as possible. we want as many people to stake with validators as possible (via validator LSTs). all it took was getting rid of the selfish, winner-take-all mindset.

that's why I think we can be bigger than lido. because we are building a moat that grows bigger by working and helping others, not extinguishing others.

PS i get this question a lot: what about jito? jito's great, but jito's not lido. jito is flashbots. they don't care about their stake pool except insofar as it gets 100% of stake to run the jito MEV client. their stake pool is instrumental, but it's a legible metric that's easy to sell to retail. they love our reserve pool because it gives them free liquidity. we love what they're doing with stakenet because it makes our LST management easier. we love them and they love us.