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Quantstamp Kudelski
Quantstamp Kudelski
Token profile
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Last updated: Aug 16, 2023
Socean is an algorithmic staking pool running on the Solana blockchain. It allows for the pooling of funds (SOL tokens) to be managed on the user’s behalf and delegated to a group of validators. The pool issues depositors a token (scnSOL) that represents their ownership in the pool.
Launched in September 2021, the project is designed to simplify the staking process for SOL holders and make the assets deposited in the stake pool liquid. In December 2021, Socean announced the closing $5.75M seed round led by Dragonfly Capital.
Socean allows its users to continue to actively participate in DeFi even when their assets are locked in the pool. This is achieved by providing them with a special scnSOL token of the staking pool. These are fully interchangeable tokens that can be used for lending, borrowing, and providing liquidity.
Also, the project pays special attention to staking diversification. Socean pool monitors and delegates stake dynamically and handles the re-delegation process in a way that minimizes loss of rewards. Socean also provides monitoring tools to track the performance of validators and pool, as well as staking rewards.
Socean implements a special delegation strategy: SOL tokens are delegated in equal proportions to the top-performing validators (validators with the highest staking returns for the past five epochs). However, these validators' cumulative stake should not exceed 33.3% of all staked SOL. The significance of 33.3% is that it corresponds to the amount of stake required to halt the network.
To use Socean, wallet such as Phantom, Sollet, Slope, Solflare, needs to be connected to the Sollet app. Once connected, users get access to a dashboard showing assets staked on Socean.
It also displays data such as the total number of assets in the stack, APY, SOL price and the current epoch. Below there is a list of Socean's DeFi partners which support scnSOL tokens. By following their links, you can immediately add liquidity to the pairs with scnSOL or use these tokens as collateral to secure a loan.
The home page also features a list of more than 1,660 Solana validators. This list shows how many SOL tokens in the current epoch are delegated to a particular validator and its APY.
SOL tokens staking is done by direct deposit. In this case, the choice of the validator is made in an algorithmic way, which eliminates the "shadow" collusion of Socean with a certain group of validators. In exchange for the deposited assets, the user receives scnSOL tokens proving ownership of a non-custodial share of SOL tokens in the pool. SOL can be withdrawn from the pool at any time.
Socean Staking Pool charges a one-time deposit fee (0.15%), a one-time withdrawal fee (0.3%), and an ongoing management fee (~0.16% p.a.). These fees may be subject to change. There is a limit in the stake pool program on how and by how much fees can change over a short span of time. For instance, withdrawal fees are limited to increase by at most 1.5x per epoch. This ensures that you have enough time to withdraw your SOL before drastic changes are made.
The native Socean SOCN token was introduced on January 17, 2022 and has not yet been launched. It is supposed to be a governance token. The total offering is 1 billion, but there is no information about the allocation of tokens at this time. Token holders are entitled to a share of the protocol's profits. They will get to propose and vote on decisions like approving grants for new products and features, setting the stake delegation strategy etc.
The key features of the token will be the liquidity purchase mechanism, as well as the "Rising Tide" mechanism that allows the SOCN token price to grow in the long term. The essence of Rising Tide is that the protocol will create a private liquidity pool SOCN-USDC. Anyone can use this liquidity pool to trade, but only the Socean protocol can add or remove liquidity from it. In the future, the protocol will add its (USDC) revenues to the liquidity pool from time to time. This will result in a proportional increase in the spot price of SOCN. Thus, SOCN is guaranteed to track future revenues from the Socean protocol and, therefore, will continuously increase in price.
Socean team is anonymous. As stated in the information on the project website, the team actively contributes to core development of the Solana runtime, runs a mainnet validator, and participates in a number of Solana ecosystem projects.
Socean uses the Solana Foundation's reference stake pool program, which has been deployed in a production setting and has received multiple rounds of audits, feedback and scrutiny. The three audits were done by Kudelski, Neodyme, and Quantstamp. All issues have been remediated, either by Socean or by Solana.
In the course of the seed round, Socian attracted $5.75M led by Dragonfly Capital. The round participants also included CMS Holdings, Defiance Capital, Marin Digital Ventures, Sequoia India, and Solana Ventures.
In addition, some of the angel investors in this round include Julian Koh (Ribbon Finance), Francesco Agosti (Phantom), James Moreau (Jet Protocol), Cindy Leow (Drift Protocol), James Simpson (mStable), SOLBig Brain, and Cozomo de’ Medici.
Since its launch, Socean has partnered with Solana Foundation, Grape Network, Friktion Labs, and Solend.
Socean is expected to move to work on a new delegation strategy based on Bayesian mean-variance optimization and utility theory. This will make the project fully autonomous and decentralized, and native token owners will be able to participate in choosing pool parameters such as the degree of risk aversion or the amount of commissions.
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Last updated: Aug 16, 2023
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