About Solana (SOL)

Solana is a PoS blockchain that uses a new, efficient consensus algorithm called Proof-of-History to achieve scalability and security. Solana's vision is to enable decentralized applications to scale to millions of users. In contrast to other scaling solutions, Solana aims to scale censorship resistance and increase transaction throughput by an order of magnitude with highly-performant nodes that require a lot of storage and ultra-low latency.

How Does Solana Staking Work?

The Solana blockchain works through a mechanism called Proof-of-Stake. This mechanism keeps the blockchain decentralized by having different holders of the Solana token (SOL) validate transactions on the Solana blockchain.

Through this process, the network ensures that no single user can become powerful enough to tamper with transactions while also rewarding everyday owners of the token for helping to secure the protocol.

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).

How to Stake Solana (SOL)?

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
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.

What Are The Best Validators For Staking Solana?

On Solana, validator nodes can receive performance scores, which are calculated based on their overall uptime statistics. This data is what will assist you when choosing the validator node you wish to stake with.

We decided to reduce your time on choosing the best SOL token steaking validator and found it ourselves.

XBANKING staking provider has all the above mentioned qualities. It is one of the largest validators in the Solana network and has excellent features. Stake now!

Total stake and the ‘Superminority’

The first intuitive move when choosing a validator on Solana might be to go for the ones with the most SOL delegated to them. However, when it comes to decentralized networks such as Solana, being bigger doesn’t necessarily mean being the better option. In fact, the more validators receive leader slots, the less of an influence a single bad node may have on the network's integrity, censorship resistance, and decentralization.

As a delegator that wishes to contribute to the security of the Solana blockchain and ultimately its’ value, it is great to delegate to validators outside the ‘Superminority’. The Superminority consists of the smallest group of validators that collectively control 33.33% of the total stake of the network and could halt or censor Solana if they all colluded. Such a scenario is very unlikely. However, the more validators are part of the group, the safer the network will be. Thus, try to avoid choosing validators from within the Superminority when staking. Solana Beach actually hides the halt group behind an additional click on its validators interface to promote other validators of the Solana ecosystem.

Commission and APR (APY)

The commission charged by the validator has an impact on the returns you will get. That is because the commission consists of the percentage cut of your staking rewards that the validator keeps for his or her services.

A validator's Annual Percentage Yield (APY), on the other hand, is the number of the compounded yearly earnings you can expect after accounting for the fee and the performance of the validator - how well they vote on each block. In other words, your yearly interest from staking with a validator after discounting their commission.

Team and set-up

When you pick multiple validators to stake your SOL with, you are giving them the weight of your token and all the power that comes with it. Thus, it is important to know that the validators you chose are reliable and professional. Most serious validators have a website available with information about the team, content about their approach, and means to contact them. If you found a validator on Solana Beach that you wish to know more about, you can just click on the validator’s line, which will bring you to its detailed profile page. There, you can easily find more information about the respective validator.

It might be worth checking the team that runs this validator to make sure they have the needed experience. Also, look for information about the type of hardware or cloud setup they use, transparency about their practices, and fee strategy. For example, if the validator is currently charging 0% in commission, research until when they will keep it like this. Trusting the team and set up you are choosing to delegate SOL tokens to is very important.

Slot success rate

This is the percentage of slots that were successfully included in the blockchain. Validators can miss slots for various reasons related to performance and network latency. However, keep an eye on this percentage. If it’s too low, it might mean the validator is facing greater issues that might end up affecting your earnings or even the security of the blockchain if the validator is too big.

Community contributions

Validators hold a lot of responsibility for the blockchain. Due to that, having a validator team that is engaged in contributing to the community is extremely important. Validators are expected to take part in governance and community debates, helping stir the direction of the Solana network. When choosing your validator, look for information on how they contribute to the Solana community, from being active when the network faced issues to creating educational content to expand the community further. Also, try to check how they use their governance power to make Solana a better ecosystem for both validators and delegators.

Is Staking Solana Safe?

Staking your SOL is done in a non-custodial way, which means that it is as safe as simply holding SOL in your wallet.

You retain complete control over your tokens while they are staked, and you can even unstake your funds whenever you choose.

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.

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!

We wish you a good staking! ❤️

Useful links:

- How to stake Avalanche (AVAX)? Passive income from AVAX tokens.

- Staking Toncoin (TON). How to stake TON and Earn Passive Income?

- Staking Mina Protocol (MINA). How to Stake MINA? Passive Income from MINA Staking.

- Staking Ethereum (ETH). How to stake Ethereum? The Ultimate Guide.

Links used in the article:

- XBANKING Staking provider