Jito and Fragmetric launch new Solana liquid restaking token

Liquid staking protocol Jito and restaking platform Fragmetric have launched a new liquid restaking token on Solana dubbed fragSOL.

The new token is the first liquid restaking token native to Solana (SOL) and based on Jito (JTO) restaking vault receipt token, Fragmetric claimed in a blog post published on Aug. 29.

According to the platform, fragSOL is a liquid restaking token designed to address the issues of reward distribution and slashing in liquid staking tokens. This feature, available with the fragSOL token, is made possible by the unique capabilities of the Solana blockchain, the platform noted.

What are liquid restaking tokens?

LRTs are a new token type in the liquid staking market that allow participants in the decentralized finance space to earn from their staked tokens as well as Actively Validated Services rewards.

Users deposit, for instance, SOL in any liquid restaking protocol to receive the liquid staked token. The holder can then reuse this LST by restaking it to support actively validated services to earn extra yield. However, many LRT protocols face challenges around AVS rewards.

Fragmetric says its LRT token will leverage Jito’s restaking framework and Solana’s token extension to bring fragSOL’s benefits to the market. Combining liquid restaking and yield optimization allows fragSOL to boost the liquidity and composability of staked Solana tokens.

How it works

While Ethereum (ETH)-based liquid restaking protocols contend with issues related to the effective distribution of AVS rewards, fragSOL aims to navigate this via the transfer hook feature. This aspect of Solana’s token extension allows Fragmetric to manage reward distribution by ensuring the allocation of 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,”

Fragmetric.

Fragmetric’s launch of fragSOL comes a few days after Renzo launched its liquid restaking token ezSOL on Jito. The protocol also provides for the LRTs ezETH on EigenLayer and pzETH on Symbiotic.