This guide underlines the step by step approach of how to stake Solana on Solflare web wallet. By staking your Solana to the Solana network you can earn up to 7% APY as staking rewards. One of the modes of staking Solana is on the Solflare wallet.

Prerequisites:

• You need to have SOL. If not you need to purchase SOL via an exchange like Binance or Coinbase.
• Internet Connection
• Laptop.

Let us start.

What is Solana and SOL?

Solana is a high performance blockchain platform. It is way faster than other blockchain platforms including Ethereum and Bitcoin in processing transactions. It can process up to 65000 transactions per second (TPS).

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.

What is Solflare Wallet

Solflare is a non-custodial wallet developed by Dokia Capital. Non-custodial means that Solflare does not manage and is not responsible for your cryptocurrencies. It simply gives you an application to store the Private keys needed to access the SOL stored in the Solana blockchain.

Solflare was the first wallet which allowed investors to stake SOL in the Solana blockchain, without using a single line of code. Other than staking Solflare allows sending, receiving and staking SOL.

How to stake Solana on Solflare

Let us go through the Step by Step process for “how to stake Solana on Solflare web wallet”. I am assuming that you have not bought SOL yet. So, I will start from the very first step of buying SOL first and then staking it in the Solflare web wallet. In case you already have SOL, skip to Step 2.

Step 1: Buy SOL

Of course, the first step in staking SOL is to buy some SOL (if you do not have SOL already). You can buy SOL from various centralized and decentralized exchanges like Binance, Coinbase, FTX, KuCoin, Gate.io, Kraken, Gemini.

In case you already own SOL in some other wallet (like Phantom) or a crypto exchange, then you need to transfer that to the Solflare wallet as will be shown in the next steps of this guide.

Step 2: Download the Solflare wallet

Download the Solflare web wallet application.

Go to https://solflare.com/onboard

If you already own a Solflare wallet then you can click on “I already have a wallet” and restore it using your recovery phrase.

If you do not own the Solflare wallet or have forgot the Recovery Phrase, click on “I need a new Wallet”. Then copy the Recovery Phrase and keep it safely. I recommend you can write it in a piece of paper and store it in a locker or some other safe place.

Please note that, the Recovery Phrase is imperative to keep your cryptos secure. In cases where your wallet is lost, stolen or damaged, you can recreate your wallet using your Recovery Phrase. Anyone who has got access to your Recovery Phrase can recreate your wallet and steal your funds.

One of the safest ways to store your Recovery Phrase is to write it in a piece of paper and store it in a locker. I suggest keeping multiple copies of the same, so that if one of the lockers is burnt, then you do have the backup. Another method is to store it in password protected applications like Notes for iOS, Samsung Notes for Android or OneNote in your desktop or laptop.

Securely Store your Recovery Phrase

Now click on “I saved my Recovery Phrase”. It will need you to enter the saved Recovery Phrase to get in.

After this set up a strong password. Again set a strong password and store it in a secure place.

Congrats your Solflare Wallet is downloaded. It will display your SOL balance, your public key/address, options to send, receive, swap, stake and collectibles.

Step 3: Fund your Solflare wallet with SOL

Now once you have downloaded the Solflare wallet, the next step is to fund it with SOL for staking. You can transfer SOL from the exchange (or wallet) where you purchased SOL in Step 1.

In order to do so, click on “Receive”.

Then copy your public key and paste it in your exchange (or wallet) to receive SOL. You can also scan the QR code (as shown in the picture below) from your exchange mobile app to transfer SOL to the Solflare wallet.

Step 4: Start Staking you SOL

Once we have funded our Solflare wallet, we are now eligible to start staking the SOL tokens in Solflare web wallet.

Click on “Start Staking”.

Now click on “Native SOL Staking” (see the snapshot below).

As you will find, there are other options of staking SOL, namely Liquid Staking and SLRS Staking. This guide will outline the Native SOL Staking process which is the standard one. Liquid staking which gives you liquid SOL (mSOL) in exchange of SOL staked, is an advanced staking strategy which I will discuss in my future guides.

All right, now again click on Start Staking, which will navigate you to the following page.

Enter the amount of SOL to be staked.

Important disclaimer: Do not stake all your SOL to the validator. This is because you will need some SOL in transaction fees, when you will transfer SOL from the your staked account to your main wallet account. (although very less compared to Ether or other PoS staking). I will advise to keep at least 0.50-1 SOL in your main wallet.

Choose a validator. Choosing the right validator is an essential step which will keep you in safe hands and help you earn maximized rewards. Some of the prime factors to consider while choosing a validator are APY rewards performance, how decentralized they are (or aren’t!), whether they form part of the supermajority and how long they have been validating on Solana. You can check this guide for a further detailed analysis.

Once you select a validator and enter the amount of SOL to be staked, click “Stake”.

Click on “Confirm” and congrats your SOL has been staked with the selected Validator.

Risks in staking Solana

• Validator is slashed: The primary risk in staking Solana is not choosing the right validator. If the validator perpetrates a wrongful or malicious act, it might loose a part or all of its delegated SOL. This act is known as slashing of the validator. In the process you also loose the SOL staked with such a malicious and slashed validator.
• Funds stolen: One of the general risks in crypto investments and staking is when hackers steal the funds. I always advise to keep your cryptocurrencies in a hardware wallet like Ledger Nano or Trezor. But when you are staking SOL on the Phantom wallet, it comes with the risk of being hacked. A better way of staking SOL is on the Ledger Nano S, which is a hardware wallet. The hardware wallet is an offline cold storage of your cryptocurrencies, which keeps them away from hackers and malicious online practices. I will share a guide on “How to stake SOL on Ledger” soon.

Conclusion

Staking SOL on the Solflare web wallet is an easy process to start with. But certainly you need to conduct proper due diligence in selecting the Validator. One of the biggest risks in staking SOL is when a Validator is slashed. Slashing refers to the loss of a Validator’s all or part of delegated stake due to some intentional malicious practices such as creating invalid transactions or censoring certain types of transactions or network participants.

Besides, as your SOL funds increase, switch to Ledger Nano S, which is a hardware wallet. A hardware wallet is much more secured than a web or mobile wallet.

Solana is one of the most prominent blockchain platforms which is highly regarded by developers and other probable users. It is witnessing an upward trend in being widely accepted for Smart Contracts, NFTs, Metaverses and other probable blockchain use cases. Hence the utility of SOL is increasing day by day.

Hence, buying and staking SOL might be a good long term approach to reap in profits. But please conduct proper comprehensive research before making any investments.

Also, it is all right to start staking SOL on the Solflare wallet. Although in the longer term, to avoid any malicious online attacks, switch to Ledger Nano S (hardware wallet) for staking SOL.

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