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Sanctum introduces swSOL, wrapped SOL with rewards for protocols

Sanctum introduced swSOL. Part of the SOL pool stays liquid and the rest is staked through an LST. Staking rewards go to protocols, not to holding the token. ORE is in the first partner group.

SOLANA·HUB Editorial
Source: Sanctum

swSOL: wrapped SOL with rewards for protocols

Sanctum (@sanctumso) published a thread on Sanctum Wrapped SOL (swSOL) on 9 October 2026 at 10:36 a.m. Berlin time. swSOL is meant to behave like wrapped SOL (wSOL) and to be worth exactly 1 SOL. Unlike wSOL, the protocols that integrate swSOL are supposed to earn rewards on the back end.

In the first post Sanctum writes that 2.2 billion US dollars of SOL sits in wSOL and earns nothing. The post gives no method for that figure.

The technical documentation describes the program with mainnet addresses. A query of mint swso1x7A8Dy36znxtcstSVLNseeCQzNV3wVAfa5GGLu on 9 October, through the public Solana RPC, at slot 454893859, showed a supply of 2,021.765063372 swSOL. The mint has 9 decimals, no freeze authority, and its mint authority is pool account CugxVX9C5N1gmGTB4DGLjTcod1jTJtJFXgnkm9ExjyDP, the account named in the documentation. That is the chain state at that slot, not a distribution figure from Sanctum.

Note: This is reporting, not investment advice.

How the Pool Is Built

Wrapping deposits SOL into a single global pool and mints swSOL 1:1. There is one mint and one pool for every integrator.

The pool keeps part of the SOL liquid. That part is the reserve and pays redemptions in SOL. The rest is staked through a liquid staking token (LST). The technical documentation calls it a permissioned LST. It does not name which LST. Only tokens whose value calculator is on a whitelist, and that the pool manager has added, can be held as backing.

The liquid share is the reserve ratio. Two parameters set the band: a floor (rrr_floor) and a ceiling (rrr_ceil). The documentation defines the parameters. It does not publish the current values. Sanctum’s rebalancer is supposed to keep the pool near its target. The target is derived from the floor and the ceiling. When liquid SOL sits above that target, the rebalancer moves the excess into backing tokens. If the reserve falls below the floor, anyone may permissionlessly swap backing tokens back into SOL. The documentation calls that liquidation. The overview says liquid SOL can be topped up at any time, while unstaking the staked share settles at the epoch boundary.

On that overview, swSOL is not a staking receipt and should not be treated as one. The token itself does not accrue value. There is no exchange rate that drifts away from SOL. Sanctum writes that 1 swSOL stays 1 SOL.

The accounting rule in the technical documentation sets depositors’ claims as the liquid reserve plus the amount moved out into backing, minus protocol fees not yet claimed. swSOL supply must stay at or below that amount. That is why Sanctum says the price stays at 1 SOL. The rule describes cover in the internal accounts. It does not say that every redemption pays SOL to the destination account in every case.

Redemption When the Reserve Runs Out

Minting is permissionless. The mint instruction has to sit in the same transaction as the SOL transfer, because otherwise someone else could mint against SOL already in the pool. Redemption is burn, then claim. The documentation lists no mint, burn or redeem fee on that path, only transaction costs. Minting and burning are 1:1 there.

In normal operation the SOL comes from the liquid reserve. If the reserve runs dry, the overview names two paths. Holders can still redeem instantly to SOL through Sanctum’s liquidity layer, or claim the pool’s backing tokens directly. The technical documentation describes the second path as the ClaimHolding instruction. Fee-equivalent tokens stay in the pool’s holding, and the claimant receives backing tokens worth the amount net of the fixed fee and the performance fee. A later claimant can receive slightly fewer tokens than an earlier one. The documentation notes that effect as intended. The same page also describes a swap between two pools through a shared holding token.

The overview calls the liquidity layer a backstop for an instant SOL redemption. The technical instruction list does not name a separate instruction for it. Neither page says how that layer is funded.

Who Receives the Rewards

Sanctum attributes staking rewards to integrators, not to holding swSOL. Attribution uses a memo instruction in the same transaction, in the form sols: followed by the integrator’s address in base58. Sanctum keeps the ledger off-chain, from indexed events. Each minted lot is attributed to exactly one integrator. Transfers consume lots in a token account first in, first out. A mint with no matching memo is attributed to the Sanctum integrator. Memos are deliberately not checked against a signature. Any party may pay for the attribution of a mint.

The overview says each integrator decides how rewards reach its users. Some partners may place them directly in user vaults of their protocol. It does not say which of the named partners do that.

Protocol fees are separate. The fixed fee is capped at 10 percent. The documentation states neither the current rate, nor the performance fee, nor how staking rewards are split between Sanctum and partners. The fee beneficiary can claim accrued protocol fees as newly minted swSOL.

The First Partners

In the thread Sanctum names five accounts as the first batch of partners integrating swSOL into their workflow: @useDiversiFi, @Lavaragexyz, @Lexur, @omnipair and @ORE. More partners are to be announced. The post does not say which of these integrations are already running.

@ORE is the account of ORE, the proof-of-work token on Solana. How mining, refining and the buyback work is covered in ORE on Solana.

Sanctum’s thread names decentralised exchanges and launchpads, internal and external treasuries, and perp exchanges as the places swSOL is for.

Technical details

The mint uses the classic SPL token program (TokenkegQfeZyiNwAJbNbGKPFXCWuBvf9Ss623VQ5DA), with 9 decimals and no freeze authority. The documentation says swSOL has no Token-2022 support. The program id is so1f7APRw5pJ5iNJrM9g5X9tQgXzk8kMUnXxDNdt99b.

The program is upgradeable. The upgrade authority is Bj7mTwp1LYnDNfQ2jxDXhcWChBBNXgBF4trLk23wk8ua. According to the documentation, admin, manager, rebalancer and the reserve-ratio controller are Sanctum multisigs or Sanctum-operated keys. Those keys can also change the backing tokens and the loss tolerance on a rebalance.

A rebalance from SOL into a backing token must preserve at least 1 minus the configured tolerance of SOL value. That tolerance is capped at 1 percent. In every other direction the rebalance must at least preserve SOL value.

Risks the Documents Describe

  • The pool is not fully liquid by design. An instant payout in SOL depends on the reserve and, if that is empty, on the liquidity layer, which only the overview describes.
  • If that path is not available, ClaimHolding delivers the backing token net of protocol fees, not SOL in the destination account.
  • The staked share sits in an LST the documentation does not name. Which validators stand behind it is not stated either.
  • The program is upgradeable. The reserve ratio, fees, allowed backing tokens and the rebalancer sit with Sanctum keys.
  • A rebalance out of SOL may lose value up to the configured tolerance, at most 1 percent.
  • The documentation does not link an audit report.

What to Watch

  • Whether Sanctum names the LST in use, the current reserve ratio and the split of rewards
  • Which of the five named partners actually mint swSOL
  • Whether an audit report is published

Sources

#sanctum #swsol #staking #defi #ore

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