Original title: Jito (Re)staking is here - Who will win the Solana restaking race? Original author: flow, crypto researcher Original translation: zhouzhou, BlockBeats

Editor's note: This article introduces the Jito (Re)staking protocol launched by Jito Labs on Solana, which allows the use of staked SOL assets to earn higher returns and potentially participate in airdrops. Users can restake SOL through three providers (Renzo, Fragmetric, and Kyros), each differing in risks, liquidity, and potential returns. The article compares their features in detail and recommends favoring Kyros, which supports fair launches and has potential airdrop returns.

The following is the original content (for easier reading and understanding, the original content has been reorganized):

After successfully building the largest liquid staking protocol on Solana, Jito Labs brings another significant development: the launch of a new restaking protocol—Jito Restaking. This restaking project goes live today and will soon open for deposits, with an initial restaking cap of approximately $25 million (147,000 SOL). For those looking to achieve higher annualized SOL returns and wanting to seize airdrop opportunities early, this is currently a very attractive opportunity in the market.

Before introducing how to maximize this opportunity, let's briefly review the fundamental principles of Jito Restaking.

What is Jito Restaking?

In simple terms, restaking refers to using already staked assets to provide security for specific decentralized services again. Although it seems unimportant, it is one of the most promising innovations in this cycle. This concept was pioneered by EigenLayer and first launched on the Ethereum mainnet in June 2023.

Examples illustrating how restaking actually works

Today, Jito finally brings this new technology to Solana through its restaking program.

Diagram of the components of Jito Restaking

Core components of the Jito Restaking framework

The Jito Restaking framework includes two main components: the restaking program and the vault program. They can be viewed as two independent entities that collaborate to provide a flexible, scalable infrastructure for creating and managing staking assets, vault receipt tokens (VRT), and node consensus operators (NCN). VRT is Jito's term for liquid restaking tokens, while NCN is similar to the active validation services in EigenLayer, representing entities that will utilize Jito's restaking solution.

The main function of the restaking program is to manage the creation of node consensus operators (NCNs), the selection mechanism for users, and the distribution of rewards and penalties. This part is invisible to users and can be seen as the core support of Jito's restaking solution.

The vault program is responsible for managing liquid restaking tokens (VRT) and customizing different restaking strategies through DAO or automated protocols. This is the primary interface for users to participate in restaking. It can be likened to how the restaking role in EigenLayer is handled by the restaking program on Solana, while the vault program acts like EtherFi, serving as a liquidity layer between users and the core restaking protocol.

Image showing how the Vault program works

3 VRT Providers

In the early stages, Jito only collaborates with three VRT providers: RenzoProtocol ($ezSOL), fragmetric ($fragSOL), and KyrosFi ($kySOL), who will jointly allocate an initial cap of 147,000 SOL. Therefore, any user wishing to restake SOL via Jito needs to choose among these three VRT providers.

Image of the landing page for Jito (Re)staking

The following is a summary of the main features of each VRT provider:

How to choose the right VRT for SOL restaking?

When selecting which VRT to choose, the key is to find the best risk-reward ratio.

The following is an analysis of each provider:

1. Risks: In terms of risks, the main focus is on protocol penalties (i.e., penalty risk) and liquidity risk. Given the current low number of NCNs and that they are in the early stages, the risks for all providers can be considered roughly the same. Renzo and Kyros utilize the best liquidity of JitoSOL, while Fragmetric accepts a wider variety of liquid staking tokens (LST), which may increase its liquidity risk. Additionally, Renzo and Kyros' VRTs will have liquidity from the start, whereas Fragmetric's tokens are non-transferable initially. Therefore, in terms of risk, Renzo and Kyros have the lowest risk, while Fragmetric has a slightly higher risk.

2. APY Returns: The APY of each project is expected to be similar, but it can be assumed that Renzo and Kyros, by only using JitoSOL, may have a slightly higher expected APY than Fragmetric, though the gap won't be significant.

3. Airdrop Potential: Given that all VRTs have similar risks and expected returns, the key factor in choosing a specific VRT lies in the potential for airdrop rewards. Renzo already has tokens, and while restaking may earn some future airdrop points, the potential is relatively low. On the other hand, both Kyros and Fragmetric currently do not have tokens, thus having higher airdrop potential.

Further analysis of the differences between Kyros and Fragmetric:

Features of Fragmetric: Expected to receive venture capital support, may follow a high FDV, low circulation model; inclined towards a technical and decentralized user base; collaborates with risk management firm Gauntlet; tokens are non-transferable initially; accepts multiple LSTs.

Features of Kyros: Supported by SwissBorg, which helps distribute $kySOL and potentially collaborate with major participants in Solana; may fundraise through a fair community-driven token model; has not yet begun large-scale promotion; NCN allocation methods may be based on DAO voting; supports JitoSOL.

Overall, KyrosFi is more attractive in several aspects. First, the support from SwissBorg makes it easier to distribute $kySOL and opens doors for partnerships with major players in Solana. Secondly, Kyros may adopt a fair launch approach. Finally, Kyros is relatively low-key at the moment, making its airdrop return potential more attractive.

Of course, this is a personal opinion for reference only. I hope this analysis can help you make a more informed decision when choosing to restake SOL.

"Original link"