Broadly speaking there are 3 different ways of staking your Solana tokens. Staking your Solana on a Solana compatible wallet, staking your Solana on a crypto exchange and last but not the least, staking your Solana on a liquid staking protocol. If you are ready to do some work and educate yourself, staking Solana on liquid staking protocols can give you the maximum returns. However, if you are just starting I will suggest to stake on an Exchange or a Solana wallet. This guide will give you a comprehensive overview of the best staking platform for Solana in 2022.
Note: To stake your SOL tokens, the first step, of course is to buy some Solana tokens (SOL) and keep them in a Solana compatible wallet like Phantom, Solflare.
Table of Contents
What is Solana?
Solana is a high performance blockchain platform. It is way faster than other incumbent blockchain platforms including the popular ones like Ethereum and Bitcoin in processing transactions. It can process up to 65000 transactions per second (TPS). It means you can create Dapps and send normal transactions much faster and cheaper in Solana as compared to other blockchain platforms.
SOL is the native cryptocurrency of the Solana blockchain.
The Solana blockchain platform was launched on 16th March 2020. Solana was founded by Anatoly Yakovenko and Greg Fitzgerald.
What is Solana Staking?
Staking refers to the mechanism of locking your cryptocurrencies (Solana in this case) to the Smart Contract of a blockchain platform, in order to secure the blockchain network and in the process earn rewards. It is a type of consensus mechanism (Proof of Stake) in which the node which adds the next block of transactions in the ledger (of the blockchain), is decided on the basis of the number of native cryptocurrencies being staked or locked by the node. The more a node stakes the more is the chances of it getting to add the next block of transaction.
Staking is somewhat analogous to a bank savings account. You lock your funds (for a time period) in the bank savings account and in return the bank pays you interest on your savings. Similarly, in staking you lock your cryptocurrencies in the blockchain (smart contract) to secure it and get rewarded in return.
To better understand ‘Solana Staking’, we first need to understand the concepts of validators and delegators in Solana or blockchain in general.
Validators and Delegators
Validators are the full nodes in Solana (or blockchains which follow Proof of Stake consensus mechanism), who can participate in the Proof of Stake consensus mechanism and hence verify and add the next block of transactions in the Solana blockchain. Hence, validators help to maintain the speed, security and censorship resistance of the Solana network. Running a validator node is quite costly and cumbersome. It requires high throughput computer systems. Not everyone specially someone who is just starting in Solana staking would prefer investing this much time and effort to become a validator to stake Solana. You can check the complete specifications here.
If this is the case, then how do you stake Solana? The answer is by becoming a delegator.
A delegator is any other node in the Solana network (like you and me), which delegates their Solana tokens to a validator to further stake them, earn rewards and pay a percentage of the reward back. The delegator helps one or more validator nodes to compete against other similar validator nodes. As you might be knowing, Solana is a Proof of Stake consensus blockchain platform. The probability of verifying and adding the next block in Solana is dependent on the amount of SOL staked by the validator node. Hence, delegators stake SOL tokens with validators who then compete with other validators to add the next block in the blockchain.
Note: Technically delegators do not give access and control to their SOL balance to the validators. Delegators just give their voting rights to the validators, while the access and control to the SOL balance remails with the delegator.
What is Solana Staking?
Staking in Solana refers to the phenomena in which delegator nodes stake SOL (native token of Solana) at the validator nodes to help them compete against other similar validator nodes for adding the next block in the Solana blockchain. The validator earns rewards in SOL if it wins the chance to add the next block in the Solana blockchain. A percentage of this reward is returned to the delegator.
Now let us find out the best staking platforms for Solana in 2022.
Best staking platform for Solana in 2022
As mentioned above, there are broadly three ways in which you can stake your Solana tokens (and mostly all other Proof of Stake tokens). The first one is to stake directly from a Solana compatible wallet like Solflare or Phantom. This is the best option if you are just starting. Just download a mobile or web Solana compatible wallet and follow the steps defined to stake your SOL tokens. The second method is to stake it via an exchange. And the third one is via a liquid staking platform. Let us explore all these options one by one.
The first way of staking your SOL tokens is via a mobile, web, or hardware wallet. Simply download a wallet (web or mobile). Transfer SOL tokens to it and go to the ‘staking’ option. Select the amount of SOL to be staked and click stake. That is it. I have written detailed guides on how to stake SOL tokens on Solflare, Phantom and Ledger.
The first popular wallet for Solana staking is Solflare. Solflare is one of the earliest wallets created especially for Solana. Solflare is a top-notch Solana wallet developed by Solana Labs and accessible on a number of platforms.
You can directly stake SOL on the Solflare wallet or you can connect your Solflare wallet to the Ledger Nano to securely stake SOL on a hardware wallet.
Along with a Chrome extension that enables you to manage your money in your web browser, this non-custodial wallet supports the Android and iOS mobile operating systems. You may make in-wallet swaps, store your audio and visual NFTs, and stake your SOL directly from your Solflare wallet.
Solflare is a multi-usage Solana wallet which offers:
- Buying, storing, sending and swapping tokens both from the web and mobile versions of the wallet
- Storing NFTs with complete metadata
- Staking and liquid staking SOL
- Connecting to the Solana Dapps
- Getting instant notifications of opportunities
You can refer to the Solflare Academy to get detailed insights into Solflare.
- Offers Chrome, iOS, and Android versions
- Stake, swap SOL an store NFTs
- Solflare Academy is an excellent portal to learn in depth about Solflare and Solana
- Hardware wallet support for staking-you can stake Solana on Ledger Nano via the Solflare wallet
- Not an Open Source cryptocurrency wallet
- Does not support all NFTs
Sollet is an open-source wallet. As is claimed by Sollet, it should be used by developers and advanced users. Novice or early investors should rather opt a Solflare or Phantom wallet for staking Solana.
You can directly stake SOL on the Sollet wallet or you can connect your Sollet to a Ledger Nano to securely stake SOL on a hardware wallet.
Sollet is a great choice if you’re searching for a sophisticated wallet to store, stake, swap SOL. By supporting Ethereum ERC-20 coins like USDT, wETH, and wBTC, Sollet distinguishes itself from Solflare and Phantom. It also supports digital assets, which are frequently utilized on Solana. Serum (SRM), MegaSerum (MSRM), and Oxygen Protocol are some of them (OXY).
- Additional security offered by the 24 word recovery phrase.
- Like Solflare, you can connect Sollet with the hardware wallet Ledger which makes it even more secure for staking Solana
- Support for ERC 20 tokens
- Non-custodial wallet
- Not suggested for novice crypto investors
- The User interface is not that user friendly
When it comes to the most popular and widely accepted Solana wallets for staking and other purposes, Phantom competes with Solflare for the first place. This non-custodial wallet is next in priority to the Solflare wallet only due to the fact that it supports iOS and Web Browser extensions. Unfortunately, Android is not currently supported. On Firefox, Chrome, Edge, and Brave, you can install its Solana web extension.
Similar to Solflare, Phantom provides low-cost swaps, SOL staking, and a place to store your preferred NFTs. Additionally, Phantom won’t monitor any of your personal information, such as account balances, addresses, or any other forms of information that can be used to identify you.
Phantom does have a support bot even if it doesn’t have an academy like Solflare. So, if you have difficulties, you can get support from the Phantom bot.
- Multi-browser support including Chrome, Firefox, Brave and Edge
- Does not track your personal information like account balances, addresses or any other information that can help to identify you
- Android is not supported
- 12 word recovery phrase, which compared to Sollet is less of a security
- Comparatively newer-launched in 2021
- One of the issues with staking is that the Phantom wallet by default shows the most popular validators for staking SOL. This phenomena results in people by their natural instincts choosing these popular validators and hence prevents the decentralization of the network. Because more and more SOL are staked with these popular validators, hence debilitating decentralization.
A multi-currency wallet that can be used in Windows, Mac, iOS and Android. Apart from supporting over 150 different cryptocurrencies, Exodus supports staking with Solana staking as one of the options.
It has partnered with Trezor One and Trezor Model T to trade and store cryptocurrencies securely in a hardware wallet. The wallet also offers and cryptocurrency exchange for buying, selling, trading cryptocurrencies. It also allows to store your Solana NFTs.
Exodus’ commitment to producing a top-notch product places it among the finest cryptocurrency wallets. User get regular updates to the application’s ongoing addition of new features and coins. Exodus can be the perfect wallet for you if you need one that works with Solana and other digital currencies.
- Supports multiple digital currencies (over 150)
- Sleek and easy UI
- Regular updates
- Partnered with Trezor Model One and Model T to allow users to trade and store cryptocurrencies via hardware wallet for enhanced security.
- Built in exchange apart from staking platform
- Two factor authentication missing (please check once)
Trust wallet is one of the most reputable third-party wallets available in the cryptocurrency industry. Trust wallet has all the functionality you require if you’re seeking for a premium third-party wallet for your Solana. Although Trust wallet is only available for Android and iOS and does not support web extensions.
To begin with, the Trust wallet supports a variety of cryptocurrencies, enabling users to swiftly and conveniently buy, sell, and trade in accordance with their preferences. Through Trust’s integrated exchange, customers may also buy more cryptocurrencies including Solana. So you can always purchase more SOL when you start to run low.
- Multi-cryptocurrencies and multi-blockchain support
- Built in exchange
- Easy UI
- Only mobile versions available. No web versions for Windows or Mac.
- No two-factor authentication
Ledger is one of the leaders in the hardware wallets space, apart from Trezor. Although Trezor does not support Solana staking, Ledger Nano S and Ledger Nano X support Solana staking. Now after Ledger partnering with Figment (blockchain infrastructure provider), you can directly stake Solana using the Ledger Live application. Earlier, you needed to connect a software wallet like Phantom or Solflare to stake SOL tokens on Ledger wallet.
Staking SOL on Ledger is the most secure method of staking SOL tokens. This is because Ledger is a hardware wallet and all your tokens (technically the private key to the tokens stored in the blockchain) are stored offline away from any online hacks or malicious attempts.
- Most secure method of staking SOL tokens
- Good for beginners
- Ledger Nano X supports over 100 cryptocurrencies and Bluetooth support.
- Two small buttons in the wallet makes it uneasy to operate in the beginning
- Not open source
Centralized exchanges like Binance, FTX, Kraken are best for beginners. You do not need to worry about DYOR to choose a validator. There are also low barrier for entry.
You simply put your SOL tokens in the cryptocurrency exchange and the exchange will stake them on your behalf. There are experts in these exchanges who will work on your behalf to attain maximized profit on you SOL tokens.
However, only popular and trusted cryptocurrency exchanges should be opted. You loose the custody of your SOL tokens. Your SOL tokens are deposited with the exchange and any cyber threats, malpractices or attacks can lead to you loosing your SOL tokens.
On the contrary, as discussed above, when you choose a Solana compatible wallet for staking SOL tokens, you do not loose custody of your SOL tokens. You only provide voting rights to the validators.
Some of the most trusted cryptocurrency exchanges are listed below.
Binance is a behemoth in the cryptocurrency space offering buying, selling, trading, NFT marketplaces, derivative trading, liquidity farming, swapping and more related services to its large audience. It started offering Solana staking services in February 2021 with a staggering initial rewards rate of 43.79%. It slowly dipped as the popularity of staking increased. But still Binance offer high APY and low barrier for staking SOL tokens.
At the time of writing this guide the APY of staking SOL tokens in Binance exchange is 7.98% for 30 days, 8.07% for 60 days and 14.97% for 90 days. You can always check here, the current APY for staking SOL tokens.
As you can see the minimum staking amount is 0.0001 SOL.
FTX is another cryptocurrency exchange which offers buying, selling, trading, derivatives, options, volatility products, leveraged tokens and more. It was founded by Sam Bankman Fried, a young trader on Jane Street Capital international ETF desk. The team behind FTX comes from leading Wall Street quant firms and tech companies like Jane Street, Optiver, Susquehanna, Facebook, and Google.
FTX offers staking of four different tokens-FTT, SRM, SOL and RAY.
Coming to staking SOL tokens, FTX offers 6% annualized staking rewards, at the time of writing this guide (source FTX staking website). This interest rate may vary with time basis the prevailing on-chain reward rates in Solana blockchain.
There is an unlocking period of 7 days in which the SOL tokens will not earn any reward. You can unstake your SOL tokens immediately before 7 days. However, unstaking your SOL tokens immediately will cost a 10% unstaking fee which is not advisable in normal scenarios.
crypto.com is yet another Centralized Exchange with over 50 million users buying and selling 250 plus cryptocurrencies. It supports over 40 cryptocurrencies and stablecoins for staking.
Staking with crypto.com is quite complex compared to other exchanges like Binance and FTX that we just discussed. I do not recommend it for beginners. Besides the APY for staking Solana is 1%-2% (which depends on whether the user is also staking CRO tokens-token which powers the crypto.com pay).
Kraken is a cryptocurrency exchange supporting the buy and sell of 100+ cryptocurrencies, with over 9 million clients and 190+ countries supported at the time of writing this guide (source: Kraken official website).
Kraken offer staking of 12 plus digital assets including SOL tokens. The yearly rewards for staking SOL tokens is 5%-8% at the time of writing this guide.
Value add of Kraken:
One of the benefits of staking SOL tokens in Kraken is the flexibility option being offered by Kraken. This means that if you deposit at least 0.2 SOL tokens in the staking account of Kraken, you can unstake and withdraw your SOL tokens at any time without any withdrawal charges. This makes Kraken a favorite among traders who are waiting for a good trading opportunity while keeping the tokens in a staking account to earn rewards.
Huobi is an old and trusted exchange which was established way back in 2013.
At the time of writing this guide Huobi Global offers a staking return of 5.35% on Solana tokens. This means for a staking amount of 100 SOL tokens you can expect 0.0146 SOL per day.
One of the benefits Huobi offers to its users is the transparency of displaying the Validators to which your SOL tokens have been delegated.
We can see that Huobi offers modest returns on staking your SOL tokens and it may not be the first choice of the investors. However, Huobi is worth keeping an eye on, as it rolls out limited time special offers where users can earn free SOL tokens by participating in community activities. It also rolls our staking promotions via Huobi Earn which can earn APY even up to 50%.
Liquid staking protocols
The last but certainly not the least option to stake SOL tokens is via liquid staking protocols. It is mostly used by intermediate and experienced investors. Unlike normal or native staking (via a cryptocurrency exchange or wallet), where your SOL tokens are locked until they are staked with the platform, in liquid staking the SOL tokens are not locked and you can, apart from staking, explore other opportunities to earn additional rewards on your SOL tokens. For example you can earn additional rewards by using the SOL tokens in a DeFi AMM to provide liquidity to one of its pools or use the SOL tokens as collateral in a DeFi lending/borrowing protocol to get a loan in the form of any other cryptocurrency of your choice.
Actually these liquid staking platforms provide you with derivative tokens in return of the SOL tokens you stake at these platforms. For example Marinade provides you the derivative token mSOL, Lido with stSOL, in return of the SOL tokens staked. You can use these derivative tokens just as you would have used SOL tokens to further trade, buy, sell and other activities.
So how does the liquid staking works? First we deposit SOL tokens in the liquid staking platform like Marinade. In return Marinade provides you the derivative token mSOL. As said, you can explore other tools to invest the mSOL. Now, the liquid staking platform delegates your SOL tokens to a number of validators basis their research to provide you the maximized returns. Hence, in liquid staking you do not need to DYOR (Do your own research) and hence invest the time and effort to choose the best possible validator.
Let us explore the best liquid staking platforms for Solana tokens.
- Marinade is, I can say the most popular liquid staking platform for Solana tokens (SOL). It is the first liquid staking protocol or platform built on top of the Solana blockchain.
- It is an open source permissionless DAO. You can become a liquidity provider to the SOL-mSOL pool.
- When you stake SOL tokens in Marinade, it provides you the derivative tokens, namely mSOL.
- The value of mSOL increases relative to SOL tokens over time with the end of every epoch.
Price of mSOL=total staked/tokens minted
- mSOL can be used in several Solana DeFi protocols to gain additional returns.
- Marinade delegates the staked SOL tokens to over 400 validators which fosters decentralization in the Solana blockchain.
- As of now,
total value locked on Marinade is ~7 million SOL=~$259.88 Million
APY is 5.83%
Number of validators 480
Where can I use mSOL?
You can use your mSOL tokens in varied Solana DeFi protocols like staking, liquidity providers, lending/borrowing and leveraged farming.
- Marinade Staking: MNDE is the governance token of the Marinade DAO. By staking your mSOL tokens you will be allocated MNDE governance tokens. Your mSOL safely sits in the Marinade smart contract while you also enjoy rewards on your MNDE tokens.
- Liquidity Providers: You can deposit mSOL tokens to a Liquidity Provider (LP).
- Lending/borrowing: Lend your mSOL tokens to others to earn additional returns or use mSOL as a collateral to borrow other assets for yourself.
- Leveraged farming: Set of automated strategies allowing users to leverage their yield farming positions.
- Another popular liquid staking provider for Solana which also offers liquid staking of Ether tokens of the Ethereum 2.0.
- Lido provides stSOL as the derivative tokens in return of your staked SOL tokens. You can use them to explore additional rewards in DeFi protocols in Solana.
- Unstake anytime by swapping stSOL on the secondary markets
- Wallets supported: Phantom, Solflare, Ledger, Sollet and Solong
Where can I use stSOL?
You can use derivative stSOL in Liquidity Pools (check this), as collateral in lending/borrowing protocols and even to swap for another token in an exchange.
- JPool is next to Marinade and Lido in terms of the total value locked of staked SOL tokens. It was launched in late October of 2021 and is growing rapidly. It selects validators based on ranking/scoring of these validators.
- As of now JPool offers an APY of ~5.80% (source) with an additional ~6.89% of DeFi returns that you can expect from investing the synthetic/derivative token (JSOL) to DeFi protocols like lending/borrowing, AMMs and more.
- JSOL is the derivative or synthetic token given by JSOL.
Where can I use JSOL?
- As mentioned above you can use the derivative token JSOL in partner AMMs like Raydium, Saber, Orca, Atrix to provide liquidity to their LPs. Check the partner AMMs for JPool here.
- Besides you can also lend your JSOL or use it as a collateral to borrow other digital assets. Check this.
- Socean finance is a fully transparent liquid staking platform for Solana which algorithmically selects and delegates your SOL tokens to validators to maximize your returns.
- As said it is fully transparent with a real time dashboard which displays all the validators being chosen by the platform.
- The derivative token is scnSOL.
Where can I use scnSOL?
- You can invest scnSOl further in partner AMMs like Orca, Saber, Atrix, Saros to provide liquidity to their LPs. Check this.
- Besides you can also lend your scnSOL or use it as a collateral to borrow other digital assets in lending protocols like Solend, Apricot. Check this.
How much can you earn by staking Solana?
Of course the amount you earn by staking Solana depends on the amount of Solana tokens you stake. It also depends on the platform in which you stake, the commission charged by a validator, how many stakers are already there in the platform and the current inflation rate of Solana.
However at the time of writing this article the interest rate of staking Solana varies between 5%-7% on an average.
By now we have explored all the different options available for staking the SOL tokens. Broadly we can stake SOL via a cryptocurrency wallet (like Solflare, Phantom, Ledger), a cryptocurrency exchange (Binance, FTX, Kraken, crypto.com) or a liquid staking platform (Marinade, Lido, JPool, Socean).
If you are a beginner and just testing the waters, I suggest going with a cryptocurrency exchange (esp. Binance). Binance offers a high APY of up to ~14% at the time of writing this guide. However the SOL tokens are deposited at the exchange and you loose their custody. Although exchanges like Binance offer the highest securities, these are still vulnerable to cyber threats leading to complete loss of the SOL tokens.
Cryptocurrency wallets are a great alternative to cryptocurrency exchanges if you do not want to loose the custody of your cryptocurrencies. Hot and web wallets allow you to stake your SOL tokens and in the process do not loose the custody of these tokens. You can even stake SOL tokens directly via the Ledger wallet using the Ledger Live application.
Finally you have the option to stake your SOL tokens in a liquid staking platform. These liquid staking platforms allow you to use your SOL tokens in other DeFi investment tools like AMMs, lending/borrowing protocols or even exchanges, while being staked in these liquid staking platforms.
Truly speaking the mode you choose to stake your SOL tokens depends on your preferences, your risk appetite and your ease of using these different options.
This guide is not an investment advice. It is my personal opinion. Please undergo proper research before investing in cryptocurrencies.Disclaimer
If you are sincerely looking forward to invest in cryptocurrency space and hold the investments for long, use a hardware wallet like Ledger or Trezor. These wallets store your cryptocurrencies (keys to cryptocurrencies) in an offline environment which is therefore cannot be the victim of an online hack or malware practice. Storing your digital assets in an Exchange or software wallet often attract online attacks and malwares.Word of Advice