Pye Finance has raised $5 million in a seed funding round to build a marketplace for time-locked staking positions on Solana. Pye aims to make the Solana’s $58 billion in locked stake tradeable and programmable. The seed round was co-led by Variant and Coinbase Ventures, with participation from Solana Labs, Nascent, Gemini and others.
The fundraise lands as staking enters a more institutional phase, with large investors demanding structured products rather than basic yield delegation. Grayscale has recently enabled staking across parts of its exchange-traded product lineup, attracting nine-figure inflows from professional allocators. Europe’s main staked-SOL ETP has also crossed the billion-pound mark. This shows demand for yield-bearing Solana exposure.
Despite that interest, Solana’s native staking remains largely static and underutilized, according to Pye’s founders. Roughly 414 million SOL, worth about $58 billion, currently sits in simple stake accounts that offer no secondary liquidity or structured terms. Many positions are unpriced and illiquid, while stakers often earn less than headline rates as validator margins compress.
The company argues that this unstructured architecture also hurts validator businesses, which lack predictable revenue streams. Without clear visibility into future cash flows, validators struggle to plan hiring, infrastructure spending or expansion, despite operating critical network infrastructure. Pye’s Co-founder, Erik Ashdown, say this resembles “underbanked” small businesses, which cannot easily access capital or package their earnings.
Pye is building what it calls the first on-chain marketplace for time-locked Solana staking, targeting both validators and institutional stakers. The protocol upgrades Solana’s existing stake account design by allowing validators to customize reward splits, lockup periods and payout mechanics on-chain. Those positions can then be tokenized and traded, introducing price discovery and liquidity for otherwise locked stakes.
At the core of the design are two token types representing different cash-flow claims on staked SOL. A Principal Token is redeemable one-for-one for the locked SOL at maturity, while a separate Rewards Token captures the staking yield generated over the term. Both instruments are issued when a position is created and can be held, traded or integrated into other DeFi strategies.
By separating principal from rewards, Pye aims to give validators more direct control over how they structure offers to stakers. Validators can raise effective yields in exchange for longer lockups, share more upside with large delegators, or design tiered products for different risk profiles. Stakers, meanwhile, gain the option to sell future rewards, hold principal to maturity, or use either token as collateral elsewhere.
“Validators have become the underbanked layer of Web3,” said Erik. “We’re building the financial infrastructure that lets them operate like asset managers — offering structured products, predictable returns, and better transparency for stakers.”
The launch comes as Solana’s validator economics are in flux. Native staking yields have fallen alongside the network’s declining inflation rate, reducing the headline returns available to long-term holders. At the same time, the Solana Foundation is winding down parts of its Delegation Program, which previously matched validator stakes with large subsidy allocations.
Those subsidies, reportedly involving tens of thousands of SOL per validator, provided a buffer that supported smaller operators and newer entrants. As they are reduced, validators must rely more heavily on organic delegations and differentiated offerings to maintain profitability. Pye is betting that structured staking products can fill that gap by allowing operators to compete on product design rather than simply cutting commission rates.
Co-founder Alberto Cevallos brings experience from Ethereum-based yield protocols, having previously co-founded BadgerDAO, a Bitcoin yield aggregator that once surpassed $2 billion in total value locked. Ashdown draws on a background in structured products in traditional finance and senior roles at crypto infrastructure firms. Together, they are positioning Pye at the intersection of proof-of-stake economics and structured capital markets.
Pye’s marketplace keeps positions staked at the validator level while making them transferable through what the company calls “locked stake” instruments. These locked positions can be bought and sold on secondary markets without interrupting staking activity. That setup is intended to preserve network security while giving investors more flexibility to manage duration, yield exposure and counterparty risk.
Industry figures backing the project frame it as part of a broader shift in how proof-of-stake networks handle capital efficiency. As validators’ technology stacks become increasingly commoditized, many operators are being forced to compete on more than just fees. Supporters say financial tooling that enables differentiated reward structures and integrations with DeFi could become a key axis of competition.
Investors also view the opportunity through the lens of institutional structuring. “We expect Pye’s staking marketplace to fundamentally change how staking operates on Solana,” said Variant’s Alana Levin. “By allowing validators and stakers to better align their preferences — for example, enabling validators to offer higher yields in exchange for longer lockups — Pye creates a more efficient, transparent, and incentive-aligned staking ecosystem.”
Pye completed a closed alpha earlier this year, testing its architecture with a small set of early users. The company plans to launch a private beta for validators and staking providers in the first quarter of 2025, with access requests handled through its website. Broader rollout will depend on initial demand, integration timelines and feedback from institutional stakeholders.
The project adds another layer to Solana’s increasingly crowded staking landscape, which already includes liquid staking tokens, restaking initiatives and yield-enhancement strategies. Pye’s differentiated bet is that granular control, secondary liquidity and transparent cash-flow instruments will be decisive for institutional staking, especially as regulatory and risk frameworks become more demanding.
Whether Pye’s marketplace can capture a meaningful share of Solana’s idle stake will depend on validator adoption and trading depth. However, if even a fraction of the network’s $75 billion in locked SOL migrates into structured products, the shift could meaningfully alter how staking risk and reward are priced across the ecosystem.
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AI Disclaimer: Parts of this article were drafted with the assistance of AI tools and subsequently reviewed, edited, and verified by the author and our editorial team to ensure accuracy and journalistic integrity. The final version reflects human editorial judgment and fact-checking.
