Despite having a larger crypto ecosystem, Marinade’s market cap is significantly smaller compared to Jito. Jito’s successful JTO token launch is positively impacting various projects within the Solana (SOL) ecosystem, including Marinade, a direct competitor.
Marinade, similar to Jito, released a liquid staking token (LST) for SOL investors, and this week, its governance token achieved record highs. In a swift rally, MNDE surged to $0.50 within hours, coinciding with the launch and rally of Jito’s JTO token.
Marinade’s Valuation Dynamics in Comparison to Jito
Marinade, with its fully diluted valuation standing at $500 million, faces an interesting contrast to Jito, valued at $3.5 billion, despite Jito being a comparatively smaller business. Jito’s total value locked (TVL), a metric indicating the size of a crypto project, is $460 million, whereas Marinade boasts a TVL of $737 million.
This apparent inconsistency sparked discussions within Marinade’s community Discord server, where investors pondered the reasons behind MNDE trailing behind JTO. Both assets function as governance tokens, providing holders with influence over decisions related to fee rates and treasury within their respective liquid staking (LST) protocols.
Addressing this contrast, Barrett Williams, the founder of Solana-based futures trading venue Cypher, highlighted that Jito benefits from its block building engine and MEV (Miner Extractable Value) infrastructure. These features contribute to investors assigning a premium to the smaller protocol.
However, the Thursday airdrop of JTO indirectly impacted MNDE holders as well, prompting a reevaluation of the market’s pricing of the Marinade protocol. Ally Zach, a research analyst for Messari, noted that investors likely speculated that both protocols would be valued similarly over time.
Jito and Marinade: Airdrop Dynamics and Market Mechanics
The psychology of a free money airdrop likely played a role in the dynamics between Jito and Marinade. Jito’s distribution of at least 4,900 JTO tokens to around 10,000 wallets each left many people on the sidelines. The post-launch surge of the token brought attention to this aspect of Solana, prompting those on the sidelines to join in and start buying.
Comparisons have been drawn between Marinade, Jito, and Lido (LDO), the most prominent liquid staking (LST) protocol in crypto. While Lido has been a dominant force on Ethereum (ETH), its success on Solana faced challenges, leading to its exit from the ecosystem in mid-October. This departure created an opportunity for Marinade and Jito, both of which originated on Solana and have maintained their presence on the network.
The repricing and market mechanics may also be influenced by liquidity, or the lack thereof, according to InfraRAY, head of partnerships for Solana-based decentralized exchange (DEX) Raydium. With a limited number of JTO tokens in circulation after the Thursday airdrop, even though 95% of the current distribution has been claimed, it represents only a fraction of JTO’s total supply. This scarcity of circulating tokens impacts availability for buying or selling.
Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.
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