RIADeFi
Refusal file · staking

Why Ketju rejected Sanctum Validator LSTs

Memo v1Published by Ketju Research

A registry memo, published verbatim and versioned. Superseded versions are recorded, never edited away. A rejection is a judgment for Ketju's client base and thesis, not a universal safety claim. Not investment, legal, tax, or compliance advice.

The memo

REJECTED. This entry is confirmed distinct from Sanctum Infinity, already rejected elsewhere in this registry: it is the aggregate of over 1,300 separate single- and multi-validator liquid staking tokens Sanctum has issued for individual brands and validators (Jupiter's jupSOL, Bybit's bbSOL, and hundreds of smaller, thinly-liquid tokens), each backed by its own on-chain stake pool rather than a diversified basket. Sanctum itself, not the named validator, holds day-to-day pool-management authority for every one of these tokens — a real, disclosed safeguard against a compromised validator stealing funds — but that same structure means a client evaluating "Sanctum Validator LSTs" as a single entry cannot actually evaluate any specific position: the risk, liquidity, and validator quality differ token by token across well over a thousand separate pools. Sanctum's own account of the 2025-10-11 market crash confirms "some Solana LSTs began to depeg" that day while its diversified Infinity pool stabilized and even profited — direct evidence that individual validator LSTs are structurally more fragile under stress than a diversified pool, without naming which specific tokens depegged or by how much.

What would reopen the file

  • This entry is replaced by, or a client instead evaluates, a specific named validator LST with its own diligenced liquidity and operator quality, rather than the undiligenceable aggregate
  • Named validator LSTs and depeg magnitudes from the October 2025 stress event are disclosed
  • The shared Reserve/Infinity liquidity backstop is sized and disclosed per-LST rather than as one common pool
  • A twelve-month track record with no further stress-event depeg across a representative sample of validator LSTs

Facts on file

Verdict
Rejected
Exposure
staking
Chains examined
Solana
Memo version
v1
Reviewed
Next review

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