Staked Collateral: A User Guide to Borrowing Against Native Stake

For the first time on Solana, borrow against your native stake account for any validator — only on marginfi.

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Capital Efficient Native Staking

Staking SOL plays a vital role in securing the Solana network. When users stake their SOL with validators, they help maintain the network's security and earn rewards on their SOL in return.

Traditionally, this came with a catch: once you stake your SOL, it's locked up. You can't use it for anything else until you unstake, which takes multiple days (until the end of the epoch). This created a difficult choice – either lock up your SOL for rewards or stay liquid for other opportunities in the market.

Liquid staking tokens (LSTs) emerged as a solution, letting users maintain access to their capital while staking. However, approximately 65% of the total SOL supply is staked, and about 92% of that is native staked. Vast amounts of capital has been unable to participate in DeFi due to the mechanics of native staking.

Today, marginfi changes this.

Introducing Staked Collateral: a new feature that lets you borrow against your staked SOL while keeping all the benefits of native staking. No LSTs needed, no unstaking required. Simply use your active native stake account as collateral and access SOL liquidity, exclusively on marginfi.

How Does Staked Collateral Work?

marginfi's Staked Collateral feature allows users to borrow SOL using their staked SOL as collateral while continuing to earn validator rewards. This functionality is available for any Solana validator with an established marginfi pool. Validators simply need to set up a pool to enable this feature for their stakers. (More on this later.)

Currently, users can only borrow SOL against their stake position, ensuring straightforward risk management since staked SOL maintains a 1:1 minimum value relationship with SOL. Users retain full ownership of their stake and can withdraw to a native stake account at any time. For accounts with multiple stake positions, users can select which position to use as collateral.

Upon deposit, the stake account will no longer appear in the user's wallet. Users can deposit their entire stake or a portion, with partial deposits automatically splitting the stake account. The stake account becomes visible in the wallet again upon withdrawal.

Risk Management and Liquidations

Liquidation risk for staked collateral positions is uniquely confined to interest rate dynamics rather than price fluctuations. Since both collateral (native stake) and debt (borrowed SOL) are denominated in the same asset, their values remain perfectly correlated, eliminating traditional price-based liquidation risks.

The primary liquidation trigger would be a sustained period where SOL borrow rates exceed validator APY. However, this scenario is highly improbable due to market mechanics: as borrow rates increase, lending rates follow, creating arbitrage opportunities that naturally normalize rates.

If a position becomes eligible for liquidation, any liquidator can intervene by paying SOL to claim the staked position. The liquidator receives a premium in staked SOL, ensuring there's sufficient incentive to maintain system health. This process guarantees lender protection while maintaining the fundamental value relationship between staked and liquid SOL.

Creating a Validator Bank

Banks can be created permissionlessly for any validator. Once established, bank settings are immutable and charge no fees. marginfi maintains control only over essential security parameters such as deposit limits.

The Staked Collateral system uses Solana's SPL Single Pool program. The implementation process begins with creating a validator-specific stake pool, after which marginfi establishes a corresponding bank configured to accept the pool's tokens as collateral.

The technical implementation operates seamlessly in the background. Users' native stake transfers to the SPL Single Pool program, which issues receipt tokens representing their staked position. These tokens serve as collateral within marginfi. While the system relies on Pyth's SOL oracle for price feeds, this introduces minimal depeg risk within epochs.

New pools require one epoch (2-3 days) before lending can begin, with stake pools transitioning through activating, active, and deactivating states. The initial pool creation costs approximately 1.1 SOL, enabling ongoing functionality. Currently, users can borrow only SOL against their staked collateral, maintaining straightforward risk management.

This architecture particularly benefits institutional users who prefer native staking over liquid staking tokens for tax considerations. The immutable pool settings and absence of controlling entities provide additional security assurances for all participants.

Using Native Stake: Step by Step

To post your native stake as collateral on marginfi, simply navigate to app.marginfi.com and click "Select token" on the dropdown menu. Make sure the "Lend" tab is selected in the action box.

You will see a dropdown selection of supported validators. Native stake listings are denoted with a "Native stake" info tag. Click the native stake listing for the validator youyou have native stake on to post your stake as collateral.

Don't see a validator that you're natively staked to? No issue. You can add support for any validator using the "Create staked asset pool" action button at the bottom of the desktop app (Lending page).

Once you've posted your native stake account as collateral, you can view it on the Portfolio page like any other collateral asset.

You can then borrow SOL against your native stake the same way you typically perform borrows on marginfi. Select the "Borrow" tab in the action box, and choose SOL in the asset dropdown menu.

Unlock Capital. Keep Your Stake.

Staked Collateral marks a fundamental shift in Solana's staking landscape by combining native staking benefits with the capital efficiency of liquid staking. Users can now access enhanced utility for their locked SOL without compromising security or superior staking rewards.

Validators can contact @masterzorgon on Telegram with any questions, or simply visit app.marginfi.com to enable Staked Collateral for your stakers.