Marinade: Stake Auction Marketplace

Marinade Finance is a liquid and native staking protocol built on the Solana blockchain. It allows users to stake their SOL tokens to earn rewards while maintaining liquidity and contributing to the decentralization of the Solana network.

Marinade: High Fee Redistributions by Epoch

SAM rewards redistributed from validators labeled as "High Tip Earners"

Marinade: High Fee Redistribution Totals

Methodology: Capturing High Tip Earning Validator Rewards Redistributed to Marinade Ecosystem Stakers

To evaluate the redistribution of high tip earning validator rewards back to Marinade stakers, we followed this process:

1. Establish Global Jito Tip Baseline

  • Calculated the global median of average tips earned by all validators over the past year.

2. Filter Active Validators

  • Kept only validators with 50+ unique tip events, to ensure enough data is available.

3. Measure Tip Skewness

  • For each validator, we calculated the skew between their average tip and the global median.
  • From this, we identified the median skew among above-average earners.

4. Label High Tip Earners

  • Validators with high skew (above the median of above-average earners) were classified as "High" earners.

5. Adjust for Context

  • Considered validator longevity and total Jito tips earned to account for market condition changes.

6. Track Redistribution to Stakers

  • Measured how much these high tip earners paid in:
    • Bids
    • Protected events
  • This shows how much of their earnings were redistributed via the Stake Auction Marketplace (SAM) to marinade stakers.

What is SAM?

Marinade's Stake Auction Marketplace (SAM) is an innovative delegation strategy that optimizes staking rewards by introducing a competitive bidding system among validators.
Validators bid for delegated SOL, and Marinade automatically allocates stake to the highest-performing validators.

How SAM Works

  1. Stake Delegation: SOL holders stake their funds with Marinade.
  2. Validator Bidding: Validators participate in auctions, bidding for the right to receive delegated SOL.
  3. Automated Distribution: Marinade's system automatically delegates SOL to validators based on performance and bid competitiveness.

Protecting Stakers

  • MEV Mitigation: SAM helps mitigate Maximum Extractable Value (MEV) attacks by ensuring that validators engaging in such practices must bid higher, effectively redistributing MEV profits back to stakers.
    Read more
  • Dynamic Redistribution: The system dynamically reallocates stake to prevent centralization and reduce the impact of malicious validators.
  • Expected Rewards Stabilization: Validators bond SOL to cover events like unexpected downtime or low-credit activity epochs. If rewards fall below expectations, Marinade and validator bonds compensate stakers to stabilize earnings and ensure consistent returns.

Continuous Improvement

Marinade is committed to enhancing SAM by:

  • Implementing blocklists to exclude consistently malicious validators.
  • Collaborating with trusted validators to develop secure staking protocols for large SOL holders.
  • Exploring protocol-level changes to further protect against MEV and enhance staking fairness.

For a deeper dive into SAM and its benefits, visit the official documentation.

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