Sanctum Launches Infinity V2, Delivers A Solana-First Continuous Yield Model

Sanctum has rolled out Infinity V2, a major upgrade to its flagship liquidity layer that introduces continuous, slot-level yield distribution and a redesigned economic model for Solana liquid staking.

The update positions Infinity (INF) as the first liquid staking token on Solana to stream rewards in at the slot level, while also improving yield consistency, liquidity efficiency, and long-term sustainability for users and LST partners.

Since its launch in early 2024, Infinity has played a central role in scaling Solana’s liquid staking market, supporting more than 1,000 LSTs and helping grow LST penetration from under 4% of SOL supply to nearly 10%.

Continuous Yield and Smoother Performance

At the core of the upgrade is a shift away from epoch-based reward distributions (roughly every two days) toward continuous distribution at the slot level, the smallest unit of time on Solana.

This means that INF holders will now receive a steady stream of yield with earnings every second, marking a first for the Solana ecosystem.

The upgrade also introduces a yield smoothing mechanism designed to address volatility caused by large, short-term spikes in trading fee revenue. In previous versions, INF could generate outsized returns during high-volume periods, such as a 26% epoch return during the October 10 market crash, but those gains were concentrated and inconsistently reflected in median APY metrics across DeFi platforms.

Infinity V2 redistributes these gains across multiple epochs, creating a more stable and predictable yield profile. The result is higher median APY over time, improved visibility into true performance on DeFi platforms, and stronger suitability as collateral in lending protocols.

Internally, Infinity’s portfolio strategy has also shifted from a passive basket of LSTs to an actively managed allocation. Rebalancing and unstaking processes are now automated at the epoch level, with the goal of maximizing yield efficiency while maintaining deep liquidity across supported assets.

Sanctum co-founder Jaye Tan emphasized that the upgrade has implications beyond retail yield optimization, particularly for institutional adoption.

“Continuous distribution of yield allows institutions to account reliably and hold with ease,” Tan said, pointing to the importance of consistency and predictability for larger allocators.

He also highlighted improvements for DeFi strategies, including more stable looping conditions for leveraged staking products and reduced value leakage to arbitrage, as well as deeper liquidity for new LST launches.

A More Efficient Liquidity Layer for LSTs

According to Sanctum, Infinity’s primary function is to solve the liquidity problem for LST issuers, enabling new staking products to launch quickly and scale without requiring fragmented liquidity.

V2 reinforces this role with mechanics designed to improve its liquidity provisioning abilities.

Sanctum has introduced a dynamic fee model that prioritizes partner LSTs, with swap fees for partner assets set around 10 basis points, while non-partner LSTs face ~5x greater costs, incentivizing teams to launch their LSTs with Sanctum. This structure is also designed to better direct liquidity toward integrated partners such as JupSOL and dSOL, improving execution quality and reliability.

Aligning Incentives for Long-Term Growth

Infinity V2 introduces a new revenue model built around a 5% performance fee on yield.

The change is intended to better align Sanctum’s incentives with INF holders by tying protocol revenue directly to yield performance. Under the new model, Sanctum earns when INF holders earn, reinforcing a focus on portfolio optimization and stronger APY.

Sanctum's INF product lead, James Hanley, noted the improved alignment that the new model introduces:

"This better aligns incentives of Sanctum with INF holders: more portfolio optimization and stronger APY. This means when INF holders win, so does Sanctum."

The Next Era of Solana Staking

Infinity V2 marks a shift in how staking yield is experienced on Solana.

By moving from episodic reward distribution to continuous, real-time yield, Sanctum is introducing a new baseline for what users and institutions can expect from liquid staking assets.

If adopted more broadly, this model could redefine how yield is measured, compared, and integrated across DeFi, positioning Infinity as foundational infrastructure in a multi-LST future.