In our previous blog post, we introduced several innovative AMM systems we are bringing to the market. Today, we are excited to announce that we are collaborating with LIDO, one of the leading cross-chain solutions, to bring non-pegged stable pools to Solana, starting with the stSOL-SOL pool.
This pool is important because it is designed to bring long-term capital efficiency between staked SOL and SOL, even as the value of stSOL increases over time. To bootstrap this pool, we will be introducing dual rewards with both MER and LDO! 🤑
You can check out our stSOL-SOL pool here.
What is staked-SOL (stSOL)?
LIDO is one of the leading cross-chain staking solutions in DeFi. With LIDO for Solana, users can stake and grow their SOL holdings in the Solana ecosystem.
You will get stSOL by staking your SOL on LIDO. Having stSOL allows you to get instant liquidity and earn additional yields by putting your staked SOL to work across the Solana ecosystem.
To get your SOL back, you can either swap your stSOL on Mercurial or unstake it on LIDO. Note that the unstaking process will take 3–5 days.
Non-Pegged Stable Pool For stSOL / SOL
Stable pools maintain high levels of capital efficiency based on the key assumption that the assets in the pool remain pegged in value. However, for assets like stSOL (staking tokens), their price drifts from the peg due to value accrual.
So to maintain pools that maintain high capital efficiency over the long term, we are building specific swap pools to cater for Non-Pegged Stable Pairs, starting with stSOL-SOL.
To create a swap pool between stSOL and SOL, we will be caching the price of the tokens in regular intervals, based on on-chain price oracles. These oracles will be utilized to retrieve and update the token prices in the pool.
For example, the LP token price can be calculated from the virtual price in the base pools they belong in, while stSOL price can be calculated from total_token_value / total_lp_supply.
How Does The stSOL Oracle Work?
The rate for stSOL to SOL is read directly from the stSOL contract here. It is currently being updated per epoch. We run a permissionless contract that will pull the rate of stSOL to SOL from the LIDO contract directly into our stSOL-SOL pool. Since the rate update can be done permissionless, anyone can call the contract directly to update the rate to the stSOL-SOL pool. We now run a crank per epoch to update the rate routinely.
Join the Pool!
You can start depositing into our stSOL 2pool via https://mercurial.finance/pools/stsol-2pool
We will be setting up more pools in the coming weeks, so do stay tuned!
