How does solana staking work?
Solana staking works by 'delegating' your coins to a validator. In this situation your stake acts as a kind of vote of confidence in that validator, a mark of trust that helps the validator confirm transations on the Solana network. At no point does the validator have any access to your coins themselves, they remain securely in your control and can be unstaked at any time (albeit with a slight delay).
While the validation system of Solana itself is fairly complex, the process of staking your coins is suprisingly simple, in some cases taking just 4 steps:
- Hold you coins in a wallet that supports staking, such as Phantom or Solflare
- Within you wallet, decide how much to stake. It's wise to keep your wallet funded with a small amount of SOL at all times to cover transaction fees.
- Choose a validator to delegate to - see how to choose the best validator or check out our own Solana validator
- Confirm your stake and start earning rewards!
How much can you make/earn in rewards when staking Solana?
Staking solana will generate rewards for you based on the size of your investment - currently around 8% per year. This means if you stake 100 SOL today, by this time next year you should be the proud owner of 108 SOL.
But it doesn't stop there. We are in a transformative period with cryptocurrency, and Solana is rapidly gaining credibility due to its incredibly fast transactions with very low fees. As a proof of stake network it comes without the baggage of traditional proof of work currencies such as Bitcoin and (for now) Ethereum, and is thriving with the current trend of NFTs as collectors see the huge difference in transaction feed between buying with SOL vs ETH's outrageous gas fees.
All this is to say there is a strong chance that Solana becomes more popular over time. Past performance is never an indicator of future results, but Solana has increased in price 65x since the start of the year.
There is no guarantee that it will continue to rise at such a rate, but such increases are not unheard of in the crypto market.
If you are bullish on crypto, and bullish on SOL's proposition, then you could imagine a much greater increase in value over a year than 8%, when compared to a fiat currency such as USD
How long until I earn rewards from my stake?
How frequent are payouts?
Bear in mind that your rewards won't start immediately. Solana's validation network operates in a system of 'epochs' - periods of typically 2-3 days - and rewards are earnt at the end of each epoch.
When you stake solana to a validator you must wait until the start of the next epoch to being earning rewards.
As I write we are near the end of epoch 220, with a few hours left until epoch 221 starts. If I was to stake 100 SOL now I would start earning rewards in a few hours time.
However if I waited until the evening I would have missed the start of epopch 221, and my delegated stake would earn no rewards until epoch 221 ends and 222 begins, which would take roughly 2-3 days
The same process happens in reverse: should you decide to unstake the tokens in your stake account will be locked until the end of the current period. Once the period is over you can undelegate from your account and withdraw your stake account's balance.
It's worth remembering too that annual rewards are around 8%. This means rewards per epoch are somewhat lower. Given there are around 134 epochs in a year, the reward you pay per epoch is roughly 0.06%, so you will need to give your investment time to accumulate significant rewards. Thankfully, your stake account is auto-compounding which means every epoch your total stake increases as new rewards are paid in. This maximizes the compound interest-like benefits of your staking rewards.
As with all kinds of investing it pays to 'invest early, invest often' to appreciate the benefits of compounding.
How long does it take to unstake Solana?
Depending on when you unstake your Solana, it can take anything from 5 minutes to ~48 hours. Rewards are given to stakers at the end of each epoch, and this is when new stake accounts are activated and old ones deactivated. Each epoch lasts around 2 1/2 days, so if you unstake near the end of the epoch you may be able to withdraw your funds within a few hours. However, if the epoch has just started it might take a couple of days until your stake account has fully deactivated and your funds are available to withdraw.
Where is the best place to stake Solana?
With over 1,000 validators it can be hard to choose a validator. The best places to stake are with validators who care about the state of the network and the health of their nodes. This means they should:
- Run on high performance hardware for a higher APY
- Keep their nodes running 24/7 and minimize downtime
- Operate from a datacenter with a low-concentration of stake, to avoid centralization issues
- Hold a lower than average share of network stake, to help decentralization and avoid network halts
We're proud of our validator and strive to meet all the criteria above - if you'd like to stake with us, please do!
Alternatively if you'd like to read more, we've written a guide to finding the best validator and our staking dashboard has a list of the top validators.
Is solana staking safe? What are the risks, if any?
Yes, staking solana is extremely safe: at no point do the validators you stake with have any control over the coins you stake, and you remain in control of your coins throughout the process.
At any time you can request a withdrawal back to your main wallet - although you will need to wait until the end of the epoch before your coins will arrive, which can take anything from a couple of hours to a couple of days.
The one risk that does exist is that the commission a validator charges on your rewards is subject to change depending on the whims of the owner.
This means that you may have signed up to a validator at a fee you thought was fair - say 8% - but the validator could increase this without warning. This might be a minor rise to something like 10%, which would only slightly dent your income, or if they truly went rogue they might increase it to 100% and keep all the rewards for themselves.
However this would not affect the coins you have staked, just the rewards. Since your coins are simply 'delegated' to the validator and not under the validator's control, should this happen your stake would still be 100% safe - you'd just stop earning rewards. You could simply leave and move your stake to another more reputable validator.
This helps keep the market in check - validators rely on having a significant stake delegated to them in order to stay profitable, and any abusive practices would quickly lose their stake. It would be a classic case of killing the golden goose - a short term profit in exchange for a long term business failure.
Finally of course we should point out that the price of any cryptocurrency, including Solana, can go down as well as up. But if you're here we expect you already understand that.
Note: On a website such as validators.app or solanabeach.io you do see validators with commissions set to 100%.
Generally this is not a sign of foul play! It's not uncommon for large financial institutions to run their own private validators, setting the commission to a maximum of 100% to avoid 3rd parties delgating stake to the network. This is mostly done for regulatory reasons - they may have to account for the rewards paid to stakers which for a large financial institution could be a significant legal and administrative burden, so it is simpler to discourage others from staking with them and avoid the issue entirely
Do I need to worry about slashing?
Some proof of stake cryptocurrencies use a system called 'slashing' to keep validator nodes in check, ensure they are operated fairly and punish bad behaviour. Depending on the cryptocurrency this may result in the staker losing a portion of their delegated funds, while others will just punsish the validator.
At present Solana has no slashing mechanism as part of their terms so your funds are totally safe from being slashed.
Can you lose money from staking on Solana?
No, it's not possible to lose any of your Solana tokens by staking on the network. Solana has been very careful to produce a staking platform where you maintain complete custody of your funds. The validators you delegate to have no way of accessing your stake account or transferring it elsewhere. There is currently no slashing on the network either, meaning you will never withdraw less Solana from your staking account than you put in.
Is Solana staking worth it?
I already own Solana, should I be staking it?
For anyone holding Solana in a wallet and with no plans to spend it in the next couple of days we would say staking is 100% worth it! There is no sense in keeping your coins sat in wallet while you 'HODL' when you could be earning an income from them.
That said, if you think you may plan to trade your SOL, buy an NFT or make other use of the coins then you should be aware it could take a couple of days to 'unstake' your coins, so this should play into your strategy.
You may wish to keep a proportion of your sol in a wallet as 'spending money' and the rest of your SOL staked, much as you might keep a current account and savings account for your household.
I don't own Solana but I'm interested in staking
For anyone who doesn't yet hold SOL the question is a little more complicated. If you're looking to hold some crypto and hope to see a return that beats the market, it is definitely worth considering. SOL's staking rewards are roughly equivalent to the average annual return you might see from buying an stock market index tracking ETF or fund, and any growth in value of the coin over the period you stake for could take your staking rewards far beyond that of the equities markets.
However you also need to consider questions such as:
- Do I think Solana has a bright future?
- Do I think I'll see Solana grow in value more or less than competing coins over the next year?
- Do I feel the crypto markets in general will trend up?
- Are there any other coins I could stake my money to with better rewards?
For example there are coins out there that offer higher percentages for your stake - some as high as 15%!
But your decision on where to stake should be more than just the raw figure for APY return. If you earn 15% on a coin that drops in value by 30% you've made a net loss, so you should really stake your funds with a coin you believe in and trust.
Why does Solana pay rewards to crypto stakers? What are the benefits for them?
Solana's goal is to offer a decentralized currency that is scalable, cost efficient and extremely fast. To do so it has based its coin on a Proof Of Stake system where validators help ensure the integrity of the system, approving transactions in a fraction of the time of other coins such as ETH or BTC.
In order to do so it needs to incentivise the validators to help assist in auditing transactions. Each validator provides a service of verifying transactions and aims to seek consensus with other nodes on the network to ensure the security of transactions. Since each validator also needs to hold a stake as a sign it can be trusted, these rewards are shared with people who choose to stake their SOL in the validation network.
By spreading stakes across the thousand+ validators in the network rather than concentrating it in the hands of a small minority it keeps the network robust and secure, preventing attacks from bad actors that might attempt to defraud holders of SOL.
In short: not only do you earn monetary rewards by staking your coins on Solana, but you actively help Solana reach its goals and ensure the integrity of the network. For many this is reason enough to stake coins or run validators, beyond any personal gain.
What APY can you earn staking solana?
The APY for Solana can fluctuate depending on the number of transactions per day and the speed at which validators complete an epoch, but at present it is between 7-8%.
The actual amount of reward you receive each epoch can also vary based on the commission rate set by the validator you stake with. These are displayed transparently by the network, and typically range between 0 and 10%. It is worth noting that the operators of validators can change this rate.
Your real world returns can also depend on the performance of a validator - how fast are they processing and voting on transactions? This can be dependent on uptime, internet connectivity speeds and the power of the servers the validator is using.
Helpfully there is a site that shows the true, live APR you can earn from each validator, Stakeview.app . The site automatically computes:
- The performance of the individual validator in the last epoch, including
- Uptime / Reliability
- Speed (indicated by a lower 'skip rate')
- Minus the commission they charge
- Averaged over the year
This then provides a figure for the 'true' APY of a validator, which currently ranges from 8.25% to as low as 1%. Crucially some of the validators with low APY actually have fairly low commissions - between 5-10% - so their poor performance is due to technical issues rather than commission rate alone.
Is there a minimum amount you can stake on Solana?
There is no minimum amount you can stake on Solana. Each Solana coin (SOL) can be spent in tiny increments known as Lamports. Much like there are 100 cents in 1 Dollar, there are 10 billion (10,000,000,00) lamports in 1 SOL. Or put another way, 1 lamport has a value of 0.000000001 SOL.
Theoretically you could stake just a handful of lamports, although not only would you be waiting forever for rewards of any useful size, but you would also likely spend more on transaction fees than you would ever stand to make.
As with any sort of investment with a percentage return, the more you stake the greater your return. With the power of compound interest you can see considerable returns over time, but much like saving for retirement it really pays to stake more, earlier.
Solana Staking Calculator
How to calculate how much you'll earn in rewards by staking SOL
Enter The Amount Your Wish To Stake -
This could be all of your holdings, or just as many SOL as you wish to delegate to the validation network
Optionally Set The APY -
The Solana annual yield or APY can vary as the network performance improves, but is currently around 8%. You can adjust it if you like.
Optionally, model an increase in the price of SOL -
Think SOL will go up in price this month or over the next year? If so, you can adjust the percentage you expect SOL to rise and it will update your USD value calculation for you automatically.
Note all 3 time period currently use the same percentage increase for the entire period.
The impact of commission on your Solana stake rewards
Every validator on the Solana network can choose to charge a commission on your rewards. This is their payment for the computing time they spend validating, as well as a rebate on the fees they pay to vote and participate in the Solana system.
As an example, if we assume the global APY is 8%, you would receive:
- 6.8% APY at 15% commission
- 7.04% APY at 12% commission
- 7.2% APY at 10% commission
- 7.28% APY at 9% commission
- 7.36% APY at 8% commission
- 7.44% APY at 7% commission
- 7.52% APY at 6% commission
- 7.6% APY at 5% commission
- 7.68% APY at 4% commission
- 7.76% APY at 3% commission
- 7.84% APY at 2% commission
- 7.92% APY at 1% commission
- 8% APY at 0% commission
In general, a lower commission is better, but as we can see from stakeview.app it is also important to consider overall performance - if a validator goes down for half an epoch the rewards will be slashed in half. Additionally if a validator has performance issues and cannot keep up with the network it will 'skip' blocks.
A higher skip rate means a lower share of rewards for that epoch, which means lower returns for all those who have delegated their stake to that validator. Well run validators will see higher returns than slower or unreliable validators - and poor performance can have a much bigger impact on outcomes than
Which wallets support staking on Solana?
At present the best wallets for staking on Solana are Solflare and Phantom. Both now offer a mobile app that makes it even easier to manage your Solana accounts on the move - all you need is a good signal!
There are a couple of other wallets that provide staking, but they do have some drawbacks. For example, Exodus wallet allows you to stake, but only offers their own validator as an option. As a result of Exodus' popularity, their validator has an abnormally high share of stake, threatening decentralization and the security of the network.
Can I stake my Solana using a hardware cold wallet such as a Ledger Nano S?
Yes - by connecting your Ledger to the Phantom wallet you can securely stake your Solana. Your private keys remain safe on your hardware wallet, and each time you wish to delegate or undelegate your stake you simply confirm the transaction using the Ledger.
More technically minded users can also use Solana's command line tools to stake with a hardware or paper wallet, ensuring your private keys are never held on a digial device. Check Solana's own documentation for getting started with a paper wallet.
Should I stake Solana with a centralized exhange such as Binance, Coinbase, or Kraken?
We don't recommend staking with Binance, Kraken or Coinbase. Not only do you lose custody of your funds and arguably put their security at risk, but these huge centralized exchanges pose a threat to the health of Solana's network. With so much power in the hands of a centralized entity, it is important to understand the risks of staking with these exchanges.
**1. Lack of decentralization **
Solana's consensus system is designed to be decentralized and the network is designed to be resilient to attacks that could halt the network. The more stake that is concentrated in a small number of validators, the more fragile the system becomes.
These huge exchanges often run their own validators, amassing a huge share of the network stake and decreasing the Nakamoto coefficient. This means that the network will be less secure and more vulnerable to attacks.
**2. Lack of reliability and security **
Furthermore, large exchanges tend to run their nodes as a small part of their business, and often operate nodes for hundreds of blockchains at once. This means they are not as focused as independents on running a top validator - its just not a priority for them. For example, they often use outdated hardware that struggles to keep up with the rest of Solana's network, which at times of high activity have contributed to slowdowns. These slowdowns can have an impact on the yield investors receive on their stakes.
They can also be slower than others to update their software - and as Solana is still in beta it is essential validators are responsive to new software releases, helping resolve bugs faster and improve quality of service for the entire network. This lack of response can delay improvements being made to the network
**3. Geographic centralization **
Typically the systems run by large exchanges are hosted in huge, centralized datacentres such as Amazon's AWS. This means that the validators are not geographically distributed and are vulnerable to attacks. It also means in the case of an outage at one of those datacenters - of which Amazon had a few in 2021 - the entire network could be affected, as without sufficient stake online other nodes will struggle to form a consensus.