Sanctum's Bold Evolution: From Liquid Staking Pioneer to Solana Infrastructure Powerhouse

The liquid staking landscape on Solana is undergoing a fundamental transformation, and Sanctum sits at the epicenter of this evolution. In a wide-ranging conversation with Lightspeed's Jack Kubinec, Sanctum co-founder FP Lee laid out an ambitious vision for the protocol's future—one that extends far beyond its origins as a liquid staking infrastructure provider into the critical realm of transaction landing services.

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Sanctum has established itself as the backbone of Solana's liquid staking ecosystem, powering everything from validator-specific LSTs to the second-largest liquid staking token on the network, Binance's BNSOL. But the protocol isn't content to rest on these achievements. With the acquisition of Ironforge and the launch of Gateway, Sanctum is positioning itself to become what FP Lee describes as the essential infrastructure layer for anyone building on Solana.

The Genesis of Sanctum's Infinite LST Vision

When FP Lee began working on liquid staking four years ago, the dominant model was borrowed directly from Ethereum—a winner-take-all dynamic where a single protocol, like Lido, captured the vast majority of market share. But Lee recognized something fundamentally different about how staking works on Solana, a technical distinction that would shape Sanctum's entire approach to the market.

"When I started on Solana four years ago doing liquid staking, I realized down the line that because of the nature of how staking works on Solana, it's quite different," Lee explained. "And therefore, I thought the competitive landscape and how liquid staking should work on Solana is also very different."

The critical insight centers on Solana's stake account structure. When users unstake on Solana, they immediately receive their stake account rather than entering a lengthy queue. This creates what Lee describes as "semi-fungibility" among stake accounts—they're not fully interchangeable due to different validators and configurations, but they all possess inherent value and can be treated as largely equivalent for liquidity purposes.

This technical nuance enabled Sanctum to build something unprecedented: a unified liquidity layer that could support an unlimited number of liquid staking tokens without requiring each one to bootstrap its own liquidity from scratch. "My core thesis was that number one, liquid staking tokens will proliferate on Solana, that the marginal cost of creating these liquid staking tokens will be very low. We need to build for a future with infinite liquid staking tokens and a unified liquidity layer between them."

The Economics of Democratized Liquid Staking

The implications of Sanctum's approach are profound for the competitive dynamics of Solana's staking ecosystem. On Ethereum, launching a competitive liquid staking token requires millions of dollars in incentives to bootstrap AMM liquidity—a barrier that effectively protects incumbents from competition. Sanctum has eliminated this moat entirely.

"The marginal cost to create and maintain an LST is something like maybe 10 bucks, like a Hollis," Lee noted. "We can do it for you. Because we've launched so many, you just need to give me your icon and your metadata, and then we're off to the races."

This democratization has attracted an increasingly diverse set of partners. While early LST creators were predominantly Solana-native DeFi teams, Sanctum now works with centralized exchanges like Binance, Bybit, Gate, and Crypto.com, as well as companies like MoonPay that aren't traditionally associated with the Solana ecosystem.

"What is interesting is that because Sanctum is democratizing this, you're getting people that I think would normally not have thought about creating LSTs or even coming into Solana in the first place," Lee observed. "Now they're like, 'Why not?' If the marginal cost is low and Sanctum does all the work, why not?"

The Clearing House Model for Staked SOL

A recent Delphi Digital report compared Sanctum to a clearing house for staked SOL—an analogy that resonates with Lee. Just as traditional clearing houses eliminate the need for buyers and sellers to find each other directly, Sanctum removes the friction from the liquid staking market. Validators don't need to worry about bootstrapping their own liquidity, and users can freely exchange between different LSTs without significant slippage.

But Lee sees the clearing house comparison as only part of the picture. "The core business is the clearing house for staked SOL, but really it's about bringing new people into the ecosystem as well," he explained. The counterfactual matters: many of the exchanges and fintech companies now offering Solana LSTs simply wouldn't have entered the market without Sanctum's infrastructure.

This network effect compounds over time. Each new LST added to the unified liquidity layer benefits from the liquidity of all existing LSTs, while simultaneously contributing to the pool. The result is a self-reinforcing ecosystem where the marginal LST becomes increasingly easy to launch and maintain.

Market Share and the Bull Case for Growth

Despite Sanctum's success in proliferating LSTs across the Solana ecosystem, liquid staking as a category remains surprisingly underpenetrated. According to Blockworks Research data cited in the conversation, only 9% of Solana is currently liquid staked, up from around 3% in mid-2024. The vast majority of staked SOL—approximately 60%—remains in native staking.

Rather than viewing these numbers as a disappointment, Lee sees them as validation of the growth opportunity ahead. "The fact that it's 9% means that it has a lot of room to grow. I think two, three years ago, it was less than 2%, and now it's 9%. Maybe that doesn't look like very much, but it's a 4x. That's enough to sustain—across the protocols like Jito, Marinade, Sanctum—you have almost $10 billion in TVL. And then just think about if that 10x."

Lee pointed to Solana co-founder Anatoly Yakovenko's repeated bullish statements on liquid staking as evidence of its inevitability. "Every time we post something, he goes like, 'Oh, I think all SOL will be liquid staked.' He's probably even more bullish than us."

Why Anyone Would Still Native Stake

If liquid staking offers so many advantages, why does 60% of staked SOL remain in native staking? Lee identified several reasons, some more valid than others.

First, there are technical constraints: locked SOL cannot be liquid staked—users must unstake and restake through a liquid staking protocol. This represents a genuine barrier for some holders.

Second, some users cite smart contract risk, though Lee considers this concern "largely overblown." The liquid staking contract has been live for over four years, has been extensively battle-tested, and secures over $10 billion in value. "I'm not saying it's foolproof, but it's really, really better tested with a lot of money in it for a long time."

Third, and perhaps most legitimately, some users simply don't need the liquidity that LSTs provide. "If you're not interested in re-hypothecating, if you're not interested in using it in DeFi, if all you want to do is stake—well, then liquid staking is not for you because native staking fulfills all your purposes."

Lee also addressed concerns about depegging—the risk that liquid staking tokens might trade below their underlying value. "This is also a little bit overblown because you can always redeem it for native staking. At worst, it's just as illiquid or liquid as native staking."

BNSOL and the Power of Distribution

Perhaps no example better illustrates Sanctum's model than BNSOL, the Binance liquid staking token that has grown to become the second-largest LST on Solana, trailing only Jito SOL. Binance leveraged its massive distribution advantage—access to millions of users worldwide—while Sanctum provided the underlying infrastructure.

Interestingly, Lee clarified that Sanctum doesn't have a revenue-sharing agreement with Binance for BNSOL. Instead, Sanctum earns fees when users interact with the unified liquidity layer—for example, when unstaking or swapping between LSTs. "When people are unstaking and they go through our liquidity layer, we still clip the fees, trading fees and things like that. So we do support it, but not completely."

This arrangement highlights the power of Sanctum's infrastructure position. Even without direct partnerships, the protocol benefits from the growth of the broader liquid staking ecosystem through its role as the liquidity backbone.

Sanctum's Revenue Model Explained

Understanding how Sanctum generates revenue requires examining its various product lines. The primary revenue driver is the white-label liquid staking service—a "white glove" offering where partners like Jupiter, Drift, Bybit, and others set up their own LSTs with Sanctum handling the operational details.

"You as a partner—if you're Jupiter, Bybit, whatever—you set up an LST with us, and then we do it for you. It's a white glove service. We're very good at that. Delegate to whatever validators you want, whatever. In return, we charge an AUM fee, and we split that 50/50 with our partners. That's the lion's share of the revenues."

Beyond the core white-label business, Sanctum operates several supporting products:

The Router: Facilitates swaps between different LSTs, earning interchange fees with each transaction.

The Reserve: Provides instant liquidity for LST holders who need to exit positions quickly.

Infinity: Perhaps the most sophisticated offering, Infinity is simultaneously a clearing house and a yield-generating strategy. It holds a basket of partner LSTs and facilitates swaps between them, earning both staking yields and interchange fees.

Lee highlighted Infinity's impressive performance: "We've seen this consistently outperform the incumbents—for example, Marinade SOL and Jito SOL. We beat them by, I think, 100 to 150 basis points over the past 12 months consistently, which is pretty huge if you think about it. The base rate is what, 700 basis points, 7%, and then to get 8.5% or 9% on that—it's a huge difference."

The Digital Asset Treasury Opportunity

A significant emerging opportunity for Sanctum lies in the proliferation of digital asset treasuries (DATs)—publicly traded companies that hold substantial amounts of SOL on their balance sheets. DeFi DevCorp, one of the prominent Solana DATs, has already launched a Sanctum-powered LST.

Lee sees DATs as natural customers for Sanctum's white-label service. "A lot of them are just optimizing for yield. Then liquid staking is like a no-brainer for them. Because if you're just going to native stake, okay, of course you're not going to outperform. With liquid staking, you can re-hypothecate and do different stuff. It's so much better, actually."

The white-label approach offers DATs flexibility that wouldn't be available if they simply held existing LSTs like Jito SOL. "The advantage of issuing your own liquid staking token, as opposed to using somebody else's, is that you actually have full control of the validator set," Lee explained.

This flexibility extends to various customization options: specific validators, domicile requirements, deposit and withdrawal guards, permissioning, and custom reserve ratios. "If I want 80% of it staked and 20% unstaked, for example, we can do that. That sort of white glove service is something that I think is very unique, that nobody else offers."

Gateway: Sanctum's Transaction Infrastructure Play

The most significant evolution in Sanctum's strategy is its expansion into transaction landing infrastructure through Gateway. This development was catalyzed by conversations with LST partners who revealed that transaction landing was often their primary motivation for acquiring SOL through liquid staking.

"A lot of them talk about wanting to land transactions," Lee explained. "For obvious reasons, these are big Solana protocols. With stake weight QoS and things like that, you want to control SOL so that you can land transactions. That put the seed in our head: if we're helping these guys create LSTs to attract SOL to land transactions, maybe we can skip the first two steps and actually help them land transactions."

The insight proved timely. Solana's network periodically experiences congestion, making reliable transaction landing a critical concern for any serious builder on the network. "Everything that needs to run on Solana needs to land transactions obviously. If Solana is going to be the future of finance, the general-purpose blockchain for everything under the sun, the NASDAQ—then being able to process and land transactions is table stakes."

The Ironforge Acquisition

To execute on this vision, Sanctum acquired Ironforge in an all-cash deal—the team behind a well-regarded transaction infrastructure product on Solana. Lee was candid about Sanctum's limitations: while the team had expertise in DeFi and strong relationships with business partners, they lacked deep knowledge of transaction landing infrastructure.

"We looked at a bunch of teams that looked like they were doing good work. We used the product. Every team spoke very highly of the product quality. So we decided to bring this expertise in so we could accelerate the development of Gateway."

The acquisition represents a bet on Sanctum's ability to translate its brand recognition and trust into a new vertical. "People trust us to hold almost $3 billion in Solana. We don't take that very lightly, we're very grateful for it. Perhaps we can take some of that trust and expand into a new vertical, because landing transactions is also quite trusting. You have to trust the provider to be reliable, that they won't do anything funny to your transactions, like sell your flow."

How Gateway Works

Gateway functions as a transaction delivery aggregator for Solana. The network has evolved to include multiple competing services for landing transactions—Jito, Blocsroute, Helius, various RPCs—each with different strengths and pricing models. This fragmentation creates complexity for developers who must evaluate and integrate multiple options.

"You can think of Gateway as a transaction delivery aggregator on Solana," Lee explained. "You have all these different transaction landing services. There's Jito, there's Blocsroute, there's Helius, et cetera. There's the RPCs and all of this. There's a lot of confusion."

Gateway aggregates these services into a single interface, helping developers optimize their transaction landing based on their specific requirements. "If you use Gateway, you can plug in all of these delivery methods. It will help you optimize, observe, and figure out which ones are actually doing the best."

The value proposition varies by use case. Some applications require atomic, ordered transactions—for these, only certain services will work. Others prioritize latency above all else. Still others need reliable, cost-effective delivery for frequent non-time-sensitive transactions like oracle updates.

"Here's an example: you have a non-critical transaction that doesn't need to be top of block, that doesn't need to be super latency-sensitive, but it needs to land every three seconds. It needs to run every four slots. And you cannot be paying—some of these senders are charging something like 10 cents per transaction. If you're running an oracle transaction that costs 10 cents every two seconds, you're going to bankrupt yourself."

The Jupiter Parallel

Lee drew an explicit parallel between Gateway and Jupiter's aggregator model for decentralized exchanges. When Jupiter launched, DEXs might not have welcomed the competition it introduced—but users benefited enormously from optimized execution across multiple liquidity sources.

"I guess maybe the DEXs weren't that happy that Jupiter was aggregating them and forcing them to compete on price and execution. But I think everyone should actually agree that was a sea change. That was a huge benefit to the user. Before Jupiter aggregated and after Jupiter aggregated—the experience is completely different and users benefited immensely."

The same dynamic should apply to transaction infrastructure. "Some people are not going to like it. They may try to stop us, and we'll try to find a way around it. But I think overall for developers, for application developers, and then downstream for users, this is going to be a huge unlock."

Jito's Role in the Ecosystem

Any discussion of Solana transaction infrastructure must address Jito, which has become deeply integrated into how transactions flow through the network. Lee emphasized that Gateway is agnostic about which services it routes to—the choice belongs to the developer based on their specific needs.

"We are agnostic as to which one. It's about the developer's choice. Depending on your needs as an application developer, different senders may have better or worse fit for you. If you want transactions in order atomically, you really only have one choice. But if you care about latency above all else, you have another set of choices."

This agnosticism is central to Gateway's value proposition. Rather than picking winners, it provides developers with the tools to make informed decisions and the flexibility to adjust their strategy as conditions change. "You bring in all the ones you want—all the RPCs, all the senders—you tell us which ones you want to use, and then we'll route it, we'll optimize it for you, and we'll give you the benchmarks so you know: is this working? Is this performing as expected?"

Balancing Old and New Business Lines

The expansion into transaction infrastructure raises questions about prioritization. Is Sanctum shifting focus away from its core liquid staking business? Lee was emphatic that the existing business remains a priority.

"The liquid staking business isn't going anywhere. It's very much still foot all the way on the gas, because it's growing, it's only 9%. You have all these amazing catalysts with the DATs and ETFs. It's a great time to be in liquid staking right now, really honestly."

At the same time, Lee was transparent about Gateway's experimental nature. "I'll be fully honest, it's a bet, it's an experiment. Just like when I started Sanctum with this whole infinite LST thing, we didn't know if it was going to work for sure. Gateway is likewise a bet. It's really a bet on the proliferation of transaction landing infrastructure, the influx of new developers, and all this kind of stuff."

The liquid staking business provides a safety net. "If it fails, there's always that profitable and growing business that we have on liquid staking to fall back to."

Sanctum V2 and Brand Evolution

The Gateway launch is part of a broader repositioning that Sanctum is calling "Sanctum V2" or "Horizons." The goal is to shift perception of Sanctum from a narrowly-focused liquid staking protocol to a broader infrastructure provider.

"Does this mark a change in how Sanctum should be perceived? I hope so," Lee said. "This is what Sanctum V2 and Horizons, all this messaging was about—to tell the story that Sanctum is changing from narrowly focused on liquid staking infrastructure to now perhaps more broader infrastructure, more generally."

Part of this evolution involves a complete revamp of the Sanctum website and user experience. Lee teased upcoming features that will allow users to track their staking earnings in real-time—addressing a psychological barrier to liquid staking adoption. Currently, liquid staking tokens don't provide the satisfying visual of rewards compounding over time that native staking offers through wallet interfaces.

"We're building these new features so you're going to be able to see your earnings accrue in real-time. The Sanctum website went through a whole revamp. Go check it out at app.sanctum.so. We're going to be the home of Solana staking. I think that's going to be pretty cool."

The Metadao Experiment with Futarchy

Sanctum became one of the first protocols to implement futarchic governance through Metadao, an innovative alternative to traditional one-token-one-vote DAO structures. In futarchy, participants trade on prediction markets about which decisions will be best for the token's value, with the market's collective wisdom determining outcomes.

Lee shared a revealing example of futarchy in action. He was personally enthusiastic about building a Sanctum mobile app, but the futarchic markets ultimately rejected the proposal. "I was super bullish. I was really excited to build a mobile app. I was a little bit depleted. I think that as a signal to focus on our core business. In hindsight, I think it was the right call—which doesn't mean we won't build a mobile app in the future."

The experience highlighted both the strengths and challenges of futarchy. "Very counterintuitive. Very hard to explain, although we try to make it fun, try to make it accessible. We did a lot of videos with Profit. I think it's really not easy to get. The skill floor is quite high."

Despite the complexity, Lee sees genuine value in the mechanism. "This is an example of the founder really wanting one thing, and then the DAO, the community, as well as the traders—they were like, 'No, we don't think this is a good idea.' I think that is very cool."

Token Incentive Alignment

The conversation touched on broader questions about token economics and the growing trend of protocols using revenue to buy back tokens—a model popularized by projects like Hyperliquid and Pump.fun.

Lee offered a nuanced perspective. While acknowledging the appeal of buybacks as an alignment mechanism, he questioned whether they represent optimal use of protocol revenues. "If you put all your revenue into the token, I think that can be quite reflexive. Where is your runway for when things go south? Do you not want to have a war chest? Is the best use of protocol revenues simply to pump the token, or should the protocol keep some back and reinvest in R&D and growth?"

The fundamental challenge is that token holders lack the legal protections and rights that equity holders enjoy. "Fundamentally, token holders do not have the same rights as equity holders do. If I buy a token, I have to pray and kind of hope that the founders eventually return value to the token somehow, and buybacks are a very aligned way to do it."

Lee compared buybacks to democracy—the least bad solution that actually works. "This incentive alignment problem is a very, very difficult one. There's a lot of governance problems. I think buybacks are solving it, but I think it's the least bad solution rather than a good solution, to be frank."

Network Developments and Client Diversity

Lee briefly addressed developments in Solana's infrastructure, including the growing adoption of Firedancer (specifically the Frankendancer hybrid version) and the recent passage of the Alpenglow consensus upgrade proposal.

Regarding client diversity, Lee noted that Frankendancer has reached approximately 18% of stake—approaching the 20% threshold at which network liveness would depend on the client. "Client diversity is very good. Both teams are super locked in. If that makes Solana faster, that means validators print more, and that means more staking yield for LST holders."

On Alpenglow, which aims to significantly improve Solana's consensus mechanism by Breakpoint in December, Lee was more circumspect. "I don't have a good and educated take on the consensus changes just yet. I briefly skimmed the white paper. I don't want to profess that I know things."

However, he highlighted a broader point about Solana's culture of continuous improvement. "This is one of Solana's strongest qualities—we're willing to make breaking changes in the service of making the network better. It also means all of us cannot also stand still. If there are constant upstream changes, changes to consensus means changes to staking, changes to liquid staking."

This dynamic, while challenging for builders, ultimately strengthens the ecosystem. "It keeps the average Solana protocol on their toes. It keeps us on our toes and makes sure that we have to continue to innovate. It forces all of us building on Solana to just be better and not be complacent."

Gateway Adoption and Future Plans

Gateway is currently live in private beta, processing approximately 25,000-30,000 transactions daily. Lee announced that a V1 release is imminent, representing a significant upgrade from the current V0.

"Gateway is live. It serves about 25,000-30,000 transactions a day. We've been in private beta, but it is live and it is in production. We have a big change to Gateway—it was V0, private beta—we're going to roll out V1 very, very soon."

The vision is ambitious: Gateway becoming the default transaction infrastructure choice for Solana developers, analogous to how Jupiter became the de facto DEX aggregator. "We think Gateway could be the de facto—anyone pretty much uses Jupiter, people should pretty much just come and use Gateway because it will give you the best transaction landing experience."

The Case for Solana's Liquid Staking Future

Stepping back, the conversation painted a compelling picture of Solana's liquid staking trajectory. The combination of technical superiority (short unbonding periods, semi-fungible stake accounts), infrastructure maturity (Sanctum's unified liquidity layer), and incoming catalysts (DATs, potential ETF staking) creates conditions for significant growth.

Lee's thesis remains unchanged: liquid staking on Solana will look fundamentally different from Ethereum. Instead of a single dominant player capturing most market share, the ecosystem will support an ever-growing diversity of LSTs—each serving different niches, partners, and use cases—all interconnected through shared liquidity infrastructure.

"If Solana is going to be like the future of finance, the general-purpose blockchain for everything under the sun—the NASDAQ—then I think landing transactions and liquid staking are table stakes. We're building for that future."

For Sanctum, this future represents both validation and opportunity. The protocol has already established itself as essential infrastructure for Solana's liquid staking ecosystem. Now, with Gateway and the acquisition of Ironforge, it's positioning to become equally essential for transaction landing—the other critical piece of the Solana infrastructure puzzle.

Facts + Figures

• Only 9.2% of Solana is currently liquid staked, up from approximately 3% in mid-2024—representing a 4x increase but still leaving substantial room for growth.

• Approximately 60% of SOL is native staked, while 36% remains unstaked.

• BNSOL (Binance's liquid staking token powered by Sanctum) has become the second-largest LST on Solana, trailing only Jito SOL.

• The marginal cost to create and maintain an LST through Sanctum is approximately $10, down from millions of dollars required to bootstrap liquidity independently.

• Sanctum's Infinity product has outperformed Marinade SOL and Jito SOL by 100-150 basis points over the past 12 months.

• The liquid staking contract on Solana has been live for approximately four and a half years and secures over $10 billion in value.

• Gateway is currently processing approximately 25,000-30,000 transactions per day in private beta, with V1 launch imminent.

• Sanctum acquired Ironforge in an all-cash deal to accelerate development of its transaction landing infrastructure.

• Frankendancer has reached approximately 18% of stake, approaching the 20% threshold for network liveness dependency.

• DeFi DevCorp became one of the first digital asset treasuries (DATs) to launch a Sanctum-powered LST.

• Sanctum does not have a revenue-sharing agreement with Binance for BNSOL, instead earning fees when users interact with the unified liquidity layer.

• Sanctum's white-label liquid staking service operates on a 50/50 revenue split with partners.

• The Alpenglow consensus upgrade has been approved and is targeted for deployment by Breakpoint in December.

• Sanctum's futarchic governance rejected a mobile app proposal despite founder FP Lee's personal enthusiasm for the project.

• Solana's unbonding period lasts only until the end of the current epoch, compared to Ethereum's approximately one-week wait.

• Sanctum holds nearly $3 billion in Solana through its various products.

Questions Answered

What makes liquid staking on Solana fundamentally different from Ethereum?

The key difference lies in how Solana's stake accounts work. When users unstake on Solana, they immediately receive their stake account rather than entering a queue—this creates semi-fungibility among stake accounts. While they're not fully interchangeable due to different validators and configurations, they all possess inherent value that enables a unified liquidity layer. This technical distinction allowed Sanctum to build infrastructure supporting unlimited LSTs without each requiring independent liquidity bootstrapping. On Ethereum, launching a competitive LST requires millions in incentives, effectively protecting incumbents. On Solana, the marginal cost is roughly $10.

Why hasn't liquid staking adoption grown faster on Solana despite its advantages?

Several factors explain the relatively modest 9% liquid staking rate. First, locked SOL cannot be liquid staked—users must unstake and restake through a protocol. Second, some users cite smart contract risk, though this concern is "largely overblown" given the four-plus years of battle-testing and over $10 billion secured. Third, and most legitimately, some users simply don't need liquidity—if someone only wants to stake without using DeFi or re-hypothecating, native staking serves their purposes perfectly. Finally, there may be a psychological element: liquid staking tokens don't show rewards compounding in wallet interfaces the way native staking does.

How does Sanctum generate revenue from its liquid staking business?

Sanctum's primary revenue comes from white-label liquid staking services where partners like Jupiter, Drift, Bybit, and others set up their own LSTs. Sanctum charges an AUM fee split 50/50 with partners. Additionally, Sanctum earns interchange fees through the Router when users swap between LSTs, provides instant liquidity through the Reserve, and operates Infinity—a clearing house that simultaneously functions as a yield-generating strategy by holding a basket of partner LSTs and earning both staking yields and swap fees. Notably, Sanctum doesn't have revenue-sharing agreements with all LSTs it supports, like BNSOL, but still captures fees when users interact with the liquidity layer.

What is Gateway and why is Sanctum building transaction infrastructure?

Gateway is a transaction delivery aggregator that helps developers optimize transaction landing across multiple competing services like Jito, Blocsroute, Helius, and various RPCs. The idea emerged from conversations with LST partners who revealed that transaction landing was often their primary motivation for acquiring SOL. Rather than having developers evaluate and integrate multiple services independently, Gateway provides a single interface to route transactions optimally based on specific requirements—whether that's atomic ordering, low latency, or cost-effective frequent delivery. Sanctum acquired Ironforge to accelerate development since the team lacked deep transaction infrastructure expertise despite their DeFi experience.

Why did Sanctum acquire Ironforge rather than build transaction infrastructure internally?

Sanctum recognized it had strong DeFi expertise and business relationships but limited knowledge of transaction landing infrastructure. After evaluating multiple teams and their products, Sanctum chose Ironforge based on consistently positive feedback about product quality and decided an acquisition would accelerate Gateway development more effectively than building from scratch. The acquisition was structured as an all-cash deal. Lee views this as leveraging Sanctum's brand recognition and trust—earned from securing nearly $3 billion in Solana—into a new vertical where reliability is equally critical since users must trust providers not to mishandle or sell their transaction flow.

How does Sanctum's futarchic governance work in practice?

Through Metadao, Sanctum implemented futarchic governance where participants trade on prediction markets about whether decisions will be good or bad for the CLOUD token's value. The market's aggregate wisdom, measured by the area under the curve over time rather than instantaneous prices, determines outcomes. In a notable example, FP Lee wanted to build a Sanctum mobile app, but the futarchic markets rejected the proposal despite initial bullish sentiment. Lee acknowledged this was "disappointing" but likely correct—a genuine example of governance overriding founder preference. The main challenge is complexity: futarchy is "very counterintuitive" and "very hard to explain," creating a high skill floor for participation.

What opportunities do digital asset treasuries (DATs) present for Sanctum?

DATs—publicly traded companies holding substantial SOL on their balance sheets—represent a significant growth opportunity for Sanctum's white-label service. These entities are primarily "optimizing for yield," making liquid staking a "no-brainer" compared to native staking since LSTs enable re-hypothecation and DeFi participation. Critically, white-label LSTs offer DATs flexibility unavailable with existing tokens like Jito SOL: full control over validator sets, ability to meet specific domicile requirements, customized deposit/withdrawal guards, permissioning options, and adjustable reserve ratios. DeFi DevCorp has already launched a Sanctum-powered LST, potentially signaling broader adoption among DATs and future ETF products.

Is Sanctum shifting focus away from liquid staking toward transaction infrastructure?

No—Lee was emphatic that liquid staking remains a top priority with "foot all the way on the gas." The business is growing, penetration is only 9%, and catalysts like DATs and potential ETF staking make it "a great time to be in liquid staking." However, Gateway represents a genuine bet on an additional vertical. Lee was transparent that it's "an experiment" similar to the early uncertainty around the infinite LST thesis. The liquid staking business provides a safety net: "If it fails, there's always that profitable and growing business to fall back to." The goal is for Sanctum to be perceived as broader infrastructure rather than narrowly focused on liquid staking.

What does the growth in Solana client diversity mean for the ecosystem?

With Frankendancer reaching approximately 18% of stake and approaching the 20% threshold for network liveness dependency, client diversity is strengthening Solana's resilience. Lee views this positively: "Client diversity is very good. Both teams are super locked in." The practical benefit for Sanctum and LST holders is that improved performance means validators earn more, translating to higher staking yields. Beyond immediate economics, Lee highlighted that Solana's willingness to make breaking changes—including consensus rewrites like Alpenglow—keeps all builders "on their toes" and prevents complacency. This culture of continuous improvement, while challenging to navigate, ultimately strengthens the ecosystem.