Solayer is a protocol specifically designed to 'find work' for SOL tokens, aiming to maximize the utility of SOL - allowing participation in network maintenance for rewards, maintaining liquidity (usable at any time), and earning more money through intelligent allocation. It’s like a personal financial advisor who invests your SOL in different 'projects' to ensure maximum returns!
How does Solayer work? Five core components each play their role
1. Layer 2 and Re-staking: Finding more 'part-time jobs' for SOL
You can think of Solayer as an 'extension' of the Solana mainnet - it is both a Layer 2 solution (an expansion of the mainnet) and a re-staking protocol (to make staked SOL earn more).
The role of Layer 2: the mainnet (Solana) is like a big city, handling all core transactions, but sometimes traffic jams occur (congestion). Solayer, as L2, shares part of the workload (like staking management), reducing pressure on the mainnet and speeding up the process;
The wonders of re-staking: your staked SOL could only help the mainnet 'stand guard', but Solayer allows it to work in more places - such as participating in services of other DApps (decentralized applications), supporting new projects, or even acting as 'bodyguards' for other networks. This way, your SOL can earn rewards from multiple sources, naturally increasing returns!
2. Re-staking Pool Manager: The 'master of intelligent allocation' for SOL
This is the 'brain' of Solayer, an intelligent contract that specifically manages the flow of SOL. It mainly does the following things:
Receiving money: accepting the SOL staked by users;
Issuing a certificate: giving you a 'deposit receipt' (sSOL token, more details later);
Distributing money: allocating the received SOL to different 'money-making projects' (such as the Solana mainnet, other DApps, new services);
Issuing rewards: once these projects earn money, it collects the rewards and distributes them to users.
For example 🌰: you deposit 100 SOL, the re-staking pool manager might allocate 60 to the Solana mainnet for basic rewards, 30 to a popular DApp for extra interest, and 10 to a new project for high returns - all automatically, no need for you to worry!
3. sSOL: A 'staking savings book' that can be spent
When you deposit SOL into Solayer, it will immediately give you an sSOL token (a liquid staking token), which is your 'certificate' for the staked SOL and one of Solayer's core innovations!
Can be spent: sSOL and SOL are pegged at 1:1 (for example, 1 sSOL = 1 SOL + accumulated rewards), but it doesn't require a lock-up period! Once you deposit SOL, you can immediately trade sSOL on the market or participate in other DeFi projects (like lending for interest, acting as collateral), which means your staked money is 'alive';
Can earn: even though you spend sSOL, the corresponding SOL behind it is still earning rewards for you. When you want to exchange back for SOL, Solayer will give you the accumulated rewards based on the amount of sSOL you hold!
Equivalently: you deposit money in a bank and receive a savings book (sSOL), the savings book can be spent while the bank also helps you earn interest!
4. Delegation Manager: The 'gold medal broker' for SOL
The re-staking pool manager is responsible for 'distributing money', while the delegation manager is in charge of 'finding reliable projects'. Its job is to allocate SOL to the most trustworthy 'money-making targets' - validators (the 'security guards' of the blockchain network).
Choosing validators: it will cooperate with a bunch of Solana validators (or other network nodes that support SOL) to pick those reliable and high-yield ones;
Safe allocation: Delegating SOL to these validators ensures your money is safe (won't be lost) while earning stable rewards.
It's like giving your money to a financial advisor who helps you choose the most reliable investment companies, ensuring the safety of your principal while also providing dividends!
5. Reward Accounting Unit: The 'accounting guy' for SOL
This component acts like a meticulous accountant, specifically managing the distribution of rewards. It won't directly participate in staking for profits, but will:
Accounting: Real-time tracking of all the rewards earned from SOL (such as interest from the mainnet, dividends from DApps);
Calculating: based on the proportion of sSOL you hold (for example, you deposited 100 SOL, accounting for 1% of the pool), calculating how much reward you should receive;
Distributing money: the re-staking pool manager will distribute the rewards accurately to you based on its calculations.
Ensuring: every user can fairly receive their deserved rewards, not more and not less!
6. Oracle Price Feed: The 'exchange rate steward' for SOL
In order to keep the price of sSOL consistent with SOL + rewards (for example, 1 sSOL always equals 1 SOL + accumulated interest), Solayer uses a price feed from oracles - this works like foreign exchange rates, providing the latest SOL market price in real-time.
Stable exchange rate: Using data from oracles, it ensures that the price of sSOL accurately reflects the real value of your staked SOL (including accumulated rewards);
Prevent manipulation: avoid someone maliciously lowering or raising the price of sSOL to ensure fair trading.
For example: how does your SOL make money in Solayer?
Assuming you have 100 SOL and want to earn more money through Solayer:
Deposit SOL to get sSOL: you deposit 100 SOL into Solayer, and the re-staking pool manager immediately gives you 100 sSOL (1:1 exchange), this sSOL acts as your 'staking certificate', which you can spend or participate in other DeFi projects;
SOL is intelligently allocated: the re-staking pool manager breaks your 100 SOL into parts - 60 are staked in the Solana mainnet for basic rewards, 30 in popular DApps for extra interest, and 10 in new projects for high returns;
The delegation manager selects validators: it allocates these SOL to the most reliable validators, ensuring your money is safe and can earn stable rewards;
Reward accounting unit bookkeeping: After a while, the mainnet gave 6 SOL rewards, DApp gave 3 SOL, and new projects gave 1 SOL, totaling 10 SOL earned;
Distributing rewards proportionally: the reward accounting unit calculates your 100 sSOL's proportion in the pool (for example, 1%) and then distributes 1 SOL (1%) from the 10 SOL rewards to you;
Stable sSOL price: oracles update SOL prices in real-time, ensuring that your 100 sSOL always equals 100 SOL + accumulated 10 SOL rewards (which is the value of 110 SOL), and can be exchanged for cash or reinvested at any time.
Final result: your 100 SOL is not locked up, and you can earn rewards through multiple channels, while sSOL can also be spent - this is Solayer's 'magic'!
