What is Margin Staked SOL?

Margin Staked SOL is designed to maximize your SOL earnings through leveraged borrowing. Users can stake their SOL, and select leverage of up to 2x, and the system will automatically borrow additional SOL, increasing the staking amount. This process helps users maximize their yield while the entire process, including borrowing and staking, is handled automatically by the system.

 

 

 

How does Margin Staked SOL work?

The platform distributes your staked SOL (including both your own and borrowed funds) across multiple validators to enhance network security and decentralization.

• Earn bbSOL: After staking, you'll receive bbSOL, which represents your staked assets. These tokens are held as a position on the Bybit platform.

• Yield Calculation: Sanctum's smart contract allocates staked assets to various nodes for optimal rewards. The value of bbSOL consistently grows, ensuring a higher yield.

 

Here’s how Margin Staked SOL works, explained with an example:

• User A has an initial principal of 100 SOL.

• They choose to stake their SOL using Margin Staked SOL and select a leverage of 2x.

• The system automatically borrows an additional 200 SOL (100 SOL × 2).

• The total staked amount becomes 300 SOL (100 SOL + 200 SOL) minus staking fees (assuming the staking fee is zero).

• Based on this total, the system calculates the amount of bbSOL the user will receive.

 

The entire process is automated, and interest will be incurred on the borrowed amount.

 

 

 

What is the associated fee in Margin Staked SOL?

The fee covers:

Borrowing Costs: The interest incurred on the borrowed SOL.

Gas Fee: Network fees are required for transactions.

 

 

 

What is bbSOL?

bbSOL is Bybit's first exchange-backed Liquid Staking Token (LST) for Solana. When you stake SOL on Bybit, you receive bbSOL tokens, which represent your staked SOL in Bybit's staked pool. These tokens serve as a receipt, allowing you to redeem your SOL along with any earned rewards at a later time.

 

 

 

How are rewards distributed?

There will be no direct rewards distribution for bbSOL. Instead, as rewards accumulate, the value of bbSOL will gradually increase in relation to SOL, reflecting the staking rewards earned at the end of each Solana epoch (every 2–3 days). When you redeem your bbSOL for SOL, you will receive both your principal and the accrued rewards, minus any interest charges.

 

 

 

What is the difference between Margin Staked SOL and Web3/On-Chain Earn?

The main difference lies in how the rewards and assets are handled:

• Web3/On-Chain Earn: Users can withdraw their staked assets or utilize the rewards (such as staking tokens) in other ways within the ecosystem.

• Margin Staked SOL: The bbSOL generated from staking cannot be withdrawn or used elsewhere. Instead, it is locked in the staking position to earn yield through value appreciation.

 

This unique feature allows Margin Staked SOL to focus on maximizing yield by leveraging borrowed assets, while Web3 or On-chain staking typically does not involve leverage or asset locking.

 

 

 

Is there a risk of liquidation or stop loss?

Margin Staked SOL does not have a liquidation concept. Instead, the system implements a stop-loss mechanism to manage risk. The stop loss is triggered based on the ratio of loss to the principal.

 

Loss Ratio Calculation

Loss Ratio = [(Position Size × Exchange Rate) - Staked Principal - Unpaid Borrowed amount - Unpaid Interest]/Staked Principal.

 

If the loss ratio reaches the stop loss rate, auto redemption will be triggered. 

• The default stop-loss rate is -90%.

• Users can adjust the stop-loss value on the redeem page.

 

 

 

What are the minimum and maximum staking amounts?

The minimum staking amount for Margin Staked SOL is 0.5 SOL, with no maximum limit. However, if your order causes your borrowed amount to exceed the maximum borrowing limit (28,000 SOL), it will be rejected. In that case, you will need to adjust your leverage or reduce your staking amount.

 

 

 

What will happen if I have multiple staking orders?

If you have multiple staking orders, they will be combined into a single position. Borrowing will be calculated based on the total position rather than each individual order.

 

 

 

What is Net APR and how is it calculated?

Net APR reflects the earnings from staking after considering borrowing rates. It fluctuates based on borrowing rates, token prices, and staking rewards.

 

Formula

Net APR = Staking APR + (Staking APR) − Borrow Rate ) × Leverage

 

 

 

What is Total P&L?

Your Total P&L consists of:

• Realized P&L: The profit or loss locked in after closing positions.

• Unrealized P&L: The current profit or loss on open positions.

 

Formula

Total P&L = Realized P&L + Unrealized P&L

 

 

 

How is interest calculated on loan positions?

Interest is calculated hourly, with any duration under one hour rounded up to a full hour.

 

For example:

• If borrowing starts at 3:30PM, the first interest accrual occurs at 4PM.

• Interest continues to accrue hourly based on the prevailing interest rate at each interval.

 

Formula

Hourly Interest = Borrowed Amount × Hourly Interest Rate

 

 

 

Where can I view the interest rate being charged?

You can check past exchange rates on the History page. The current exchange rate is displayed in the Stake Confirmation window.

 

 

 

Can I withdraw or use the bbSOL?

No, the bbSOL obtained through Margin Staked SOL cannot be withdrawn or used elsewhere. Instead, the bbSOL remains locked within the staking position to earn yield from its value appreciation.

 

 

 

Is repayment required?

No manual repayment is required. The system handles repayment automatically when:

1. The user redeems their principal to stop staking.

2. A stop loss is triggered.

 

At this point, the system repays the borrowed amount and any accrued interest. Note that additional fees, such as gas fees, may apply during this process.

 

 

 

What are the redemption options?

There are two types of redemption:

 

1. Instant Redemption:

• Users can receive their SOL immediately with no gas fee.

• The exchange rate is determined by a third-party OTC provider with real-time updates, which may not be as favorable as on-chain rates.

• There is a daily redemption limit of 400,000 SOL for the instant redemption pool.

 

2. Postponed Redemption:

• Better exchange rate compared to instant redemption.

• An on-chain gas fee will be charged.

• Longer redemption period of 1-4 days

• Interest will still be charged during the postponed period.

• The redemption will be processed based on the exchange rate at the time it is initiated.

 

 

 

What are the minimum and maximum redemption quantities?

• Minimum and Maximum Redemption for Redemptions

The minimum amount you can redeem through redemptions is 0.01 SOL. There is no upper limit for redemptions.

 

• Daily Instant Redemption Limits

Instant redemption is subject to a daily limit set by the platform, which is updated daily at 12AM (midnight) UTC. The daily instant redemption limit is capped at 400,000 SOL. Any amount exceeding this limit will automatically be processed as postponed redemptions, requiring a waiting period of 2–3 days for validator nodes to complete the process.

 

 

 

What happens to borrowed funds during redemption?

When you redeem bbSOL, the system will automatically repay the borrowed amount and any accrued interest. The remaining SOL, after repayment, will be credited to your Funding Account.

 

 

 

What happens if the P&L(%) continues to decline?

• Margin Call: If your P&L(%) drops below the Margin Call P&L(%), you'll receive an email prompting you to stake more SOL or redeem your positions.

• Stop Loss: If your P&L(%) falls below the Stop-Loss P&L(%), your positions will be automatically redeemed to cover your loan and interest.

• Redemption Notification: A redemption notification will be initiated.

 

You will receive notifications via email, notification, and push when the alert threshold is reached.

 

Note: Closely monitor your positions, as delays or glitches in risk alerts may occur. Bybit is not liable for any forced redemptions caused by such issues.