How to Stake SOL

How to Stake SOL
0 minute read

TLDR

Staking is a popular way to earn rewards in web3 by contributing your crypto holdings to help secure and run a blockchain network — and it doesn’t have to be difficult. This explainer will show you how by covering:

  • Benefits of staking: rewards, network security, passive income
  • Ways to stake: Solo staking, staking services, exchanges
  • An overview of popular staking services on Solana
  • What you need to know before staking: lockup periods, native vs liquid
  • A step-by-step tutorial on how to stake SOL via Step Finance

Now that you understand the basics of crypto, it’s time to start considering all the things you can do with digital assets. 

One of the most common ways people participate in web3 is by staking, which is a simple way of earning interest on your crypto that plays a very important role in how blockchain networks function. If a cryptocurrency allows staking — like Solana, Ethereum, Cosmos, and others — you can stake your holdings on the network and earn rewards over time. 

The reason your crypto earns rewards while staked is because the blockchain puts it to work. Every blockchain network has what’s called a consensus mechanism, which is the way it ensures that all transactions are verified and secured without a bank or payment processor in the middle. It plays a huge role in what makes crypto decentralized and is what keeps blockchain networks running. 

Cryptocurrencies that allow staking use a consensus mechanism called Proof of Stake. If you choose to stake it, your crypto becomes part of making the blockchain more resistant to attacks, and strengthen its ability to process transactions. It’s a little bit like how you earn interest on your savings in a traditional bank, but there’s a lot more going on under the hood. Proof of Stake networks like Solana run staking through a global network of Validator nodes. When you stake through a wallet or app, you’re contributing to one of these Validator nodes, and earning a share of the rewards with stakers around the world. 

Staking is a great option for long-term crypto investors who are more interested in holding assets than trading assets. Many long-term crypto holders look at staking as a way of making their assets work for them by generating rewards, rather than just sitting in their crypto wallets. Staking is also a way to contribute to the security and efficiency of the blockchain projects you support.

Reasons why staking SOL may be desirable: 

Earn Staking Rewards: When you stake SOL, you are eligible to earn a portion of the newly minted SOL tokens as a reward for participating in the network's consensus process. 

Contributing to the Solana network: By staking your SOL, you are playing an active role in securing the Solana network, and increasing its overall utility. 

Passive Income: Staking SOL can provide a passive income stream, as you continue to earn rewards proportional to the amount of SOL you have staked, without needing to actively trade or sell your tokens.

Staking SOL on Solana

There are three methods to stake your SOL tokens, each with its own advantages and considerations:

Solo Staking: You can choose to run a validator node yourself, which involves setting up the necessary hardware and software to participate in the validation process. While this option offers maximum control and rewards, it requires significant technical expertise and resources.

Staking Services: This is the most popular and accessible option for most SOL holders. Stake pools or staking services allow you to delegate your SOL tokens to a validator node operated by a trusted third party. These services handle the technical aspects of staking, making it easier for users to earn rewards while still contributing to the network's security.

Exchanges: Some cryptocurrency exchanges offer staking services for SOL holders, allowing you to stake your tokens directly through the exchange platform.

Staking Services on Solana

Staking is open to anyone who wants to participate, and many wallets and platforms make it easy. Solana has an active ecosystem of platforms and services that you can explore, and new staking technologies continue to emerge. Here are some apps where you can explore staking today: 

Wallets

  • Solflare — A Solana-focused wallet that offers staking 
  • Phantom — A multi-chain wallet that offers staking 

Dashboards

  • Step Finance — A Solana dashboard that connects your wallet to Solana ecosystem apps and services

Platforms

  • Marinade Finance — A non-custodial, automated Solana staking and liquid staking platform 
  • Jito — A Solana staking platform that offers innovative ways to boost yield
  • SolBlaze — A Solana staking platform

What you should know before staking

Keep in mind, staking involves a lockup period during which your cryptocurrency cannot be transferred because it is still in use by the network. This limitation prevents you from trading staked tokens even if prices change. On Solana, staked SOL is accessible after 2-4 days. Before staking, you should thoroughly research the staking requirements and rules for each project you're interested in.

You can stake many kinds of assets throughout the crypto ecosystem in many different ways. Staking SOL to earn rewards as we’ve discussed, either solo or through a service, is known as native staking. A more advanced form of staking, called liquid staking, has also become very popular. Via liquid staking, users receive a derivative token in return for their staked assets that represents their share in a staking pool that are called liquid staking tokens. These LSTs can be used throughout the DeFi ecosystem while your original SOL is still locked in stake.  Don’t worry if liquid staking seems a little more complex than native staking, because we’ll get to it later on. 

Lastly, when you stake through your wallet or an app, your stake is being managed by the platform. You can also stake independently, which offers greater control and a higher potential for rewards than third-party staking, but requires technical expertise, coding knowledge, financial resources, and dedicated hours of effort.

How Do I Start Staking?

We’ll walk you through how to get started staking SOL on Step Finance (https://www.step.finance/) , a popular wallet dashboard that’s easy to use and secure. The process is very simple.

Staking with Step

Step 1: Make sure you have SOL in your wallet.

Step 2: Click on Stake SOL. Then you’ll be asked the amount of SOL you’d like to stake, and see the expected APY — which is the percentage of yield you can expect to make annually on your staked SOL. 

That’s it! You’re now staking SOL, earning rewards on your crypto, and taking part in the Solana network. Unstaking your SOL is just as easy, although unstaking is subject to lock-up phases and cooldown periods that can take up to a couple of days to expire.