A new liquid restaking token, fragSOL, has been introduced on Solana by the restaking platform Fragmetric and liquid staking protocol Jito.
Fragmetric stated in a blog post on August 29 that the new token is the first native liquid restaking token for Solana and is based on the Jito restaking vault receipt token.
The platform claims that fragSOL is a liquid restaking token created to solve the problems with reward distribution and token slicing in liquid staking.
The platform also stated that the special powers of the Solana blockchain enable this feature, which is accessible with the fragSOL token.
What are Liquid Restaking Tokens?
In the market for liquid staking, LRTs are a new kind of token that lets players in the decentralized financial ecosystem profit from both their staked tokens and rewards for actively validated services.
Users can deposit SOL using any liquid restaking mechanism to obtain the liquid-staked token. After that, the holder can earn further yield by restaking this LST to support actively validated services.
On the other hand, there are issues with AVS incentives for several LRT methods. According to Fragmetric, the LRT token will use Solana’s token extension and Jito’s restaking framework to introduce the advantages of fragSOL to the market.
By combining yield optimization with liquid restaking, fragSOL can increase the composability and liquidity of staked Solana tokens.
How it Works
fragSOL uses the transfer hook functionality to try and bridge the gap left by Ethereum-based liquid restaking protocols regarding the efficient distribution of AVS rewards.
Because Solana’s token extension ensures that node consensus network payments are distributed according to the length of time a user keeps their LRTs, Fragmetric can oversee reward distribution. Fragmetric:
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”
A few days after Renzo debuted his liquid restaking token, ezSOL, on Jito, Fragmetric launched fragSOL. Additionally, the protocol supports the LRTs pzETH on Symbiotic and ezETH on EigenLayer.
