NEXO (nexo) 
Liquid staking protocol Jito and restaking platform Fragmetric have introduced a new liquid restaking token on Solana, named fragSOL.
The fragSOL token is the first liquid restaking token native to Solana. It is based on Jito’s restaking vault receipt token, according to Fragmetric. This new token aims to address issues related to reward distribution and slashing in liquid staking tokens, leveraging the unique capabilities of the Solana blockchain.
What are Liquid Restaking Tokens?
Liquid Restaking Tokens (LRTs) represent a new type of token in the liquid staking market. These tokens allow participants in decentralized finance (DeFi) to earn from their staked tokens and Actively Validated Services (AVS) rewards. Users can deposit assets like SOL in a liquid restaking protocol to receive a liquid staked token. This token can then be restaked to support actively validated services, earning additional yield. However, many LRT protocols face challenges with AVS rewards.
Fragmetric claims that its LRT token, fragSOL, will utilize Jito’s restaking framework and Solana’s token extension to offer significant benefits. By combining liquid restaking and yield optimization, fragSOL aims to enhance the liquidity and composability of staked Solana tokens.
How it Works
While Ethereum-based liquid restaking protocols often struggle with the effective distribution of AVS rewards, fragSOL seeks to address this through the transfer hook feature. This feature, part of Solana’s token extension, allows Fragmetric to manage reward distribution by allocating node consensus network rewards based on how long a user holds their LRTs.
“When Alice transfers $fragSOL to Bob, the $fragSOL transfer hook is activated, which updates their $fragSOL balances in Fragmetric’s Rewards Module. When NCN rewards are received in Fragmetric’s vault, the reward module records the time-based balance, allowing users to claim their respective rewards. This method ensures that $fragSOL accurately calculates and distributes NCN rewards to all users,” according to Fragmetric.
The launch of fragSOL by Fragmetric follows closely after Renzo introduced its liquid restaking token ezSOL on Jito. Additionally, protocols like ezETH on EigenLayer and pzETH on Symbiotic are also part of the expanding ecosystem of liquid restaking tokens.
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