Gemini, Variant, Coinbase Bet on a New Model for Solana Staking in $5M Seed Round

Pye Finance:- Staking has rapidly become a central pillar of the crypto ecosystem as the demaded yield-generating crypto instrument.

Even sset managers are now actively exploring how staking rewards can be embedded into crypto-based investment products. Grayscale recently launched its staked Solana ETF, while BlackRock and Fidelity have both moved to integrate staking mechanics into their Ethereum ETF and trust filings.

Amid the growing market demand, major industry players such as Coinbase, Solana Labs, VC firmVariant and Gemini are backing next-generation staking infrastructure and protocols – this time Pye Finance.

Pye Finance, a startup building an on-chain marketplace for time-locked stake on Solana, has closed a $5 million seed round led by Variant and Coinbase Ventures. It also saw participation from Solana Labs, Gemini, Nascent and others.

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Pye – Staking Protocol Receives Investment

Pye Finance’s headline pitch is straightforward: convert a huge pool of otherwise idle, locked SOL into tradable, programmable financial products. Network measures indicate roughly 414–415 million SOL is currently sitting in native stake accounts. This is a pool worth tens of billions at today’s prices – and Pye says it plans to unwrap that liquidity without forcing holders to unstake.

However, instead of staking SOL under one-size-fits-all terms, Pye allows validators to offer transparent, fixed-term staking agreements with customized yield structures. Stakers can choose positions based on duration, returns, and reward composition.

Allia, investor Variant Fund informed, “Each staking position is split into principal and yield tokens. A Principal Token (PT) is redeemable 1:1 for the locked SOL at maturity, and a Rewards Token (RT) entitles holders to the staking yield.”

The company argues this decomposition lets validators offer fixed-term products. It creates predictable cash flows for operators and opens the yield stream to secondary-market activity and enables staking rewards to be traded independently of the underlying SOL.

This design is expected to unlock liquidity, price discovery, and programmability in Solana’s staking layer. It will be allowing users to sell future yield, buy locked stake, or integrate staked positions into DeFi strategies.

This is to effectively transform staking from a passive service into a composable yield market.

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Growing Market of Solana Staking

Interestingly, Solana’s staking participation is very high: about 67% of the circulating SOL supply is staked on the network. This is far above many other PoS chains.

However, in this, Liquid staking is still a relatively small slice. Only about 8–13% of all staked SOL is tied up in liquid staking protocols, while the rest remains mostly native stake.

Pye Finance is entering a space with strong incumbents controlling a large portion of liquid-staked SOL. JitoSOL alone holds the largest share of liquid-staked SOL – 44–48% of the liquid staking segment while other protocols such as Marinade Finance and Jupiter also hold meaningful shares in tens of percent. But that market is still early and growing.

Pye’s founders are pitching exactly that crossover. Erik Ashdown, who has a background in structured products in traditional markets, and Alberto Cevallos, co-founder of BadgerDAO, say their product responds to “institutional” needs for customizable terms. It aims to offer transparent reward mechanics and tradeability.  Policy changes are already accelerating consolidation among validators and elevating demand for productized staking offerings. This comes as SEC is also working on accepting staked ETF applications.

Perhaps their unique marketplace model – tokenizing both principal and yield – could carve out a niche. But this will come only if users prioritize liquidity, choice, and tradability over traditional liquid staking offerings.