A significant Solana update has been implemented, directing all optional priority fees to validators. This change has led to an increase in yields for liquid staking tokens (LSTs), which now offer the highest yields in the ecosystem. Prior to this update, Solana's median priority fee was reduced by 40%, following the new feature's activation. LSTs allow validators to distribute priority fee rewards, unlike regular staking methods. With plans for a future proposal to enable in-protocol fee sharing, liquid staking becomes a more effective means for validators to share yields with stakers. Sanctum, a Solana LST provider, announced it would create LSTs for every validator, raising the total to over 1,000. Yields for LSTs have risen significantly, with Jupiter’s LST increasing from 10.69% to 11.96%. However, concerns exist regarding the trust in validators to pass along the full yield, as converting stake into an LST may also trigger tax implications for SOL holders.

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