Solana (stSOL) Liquid Staking Guide

This guide will give you an overview on Solana network and how to liquid stake your SOL tokens.

Last updated on May 6, 2022

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Solana is a high-performance, open source blockchain that allows builders around the world to create decentralized applications with a focus on scale and speed. Solana is the new "Layer 1" blockchains aiming to make crypto networks faster and more scalable. It uses a suite of clever technologies, including a novel mechanism called “proof of history”.

 

Steakwallet provides users the option to liquid stake their SOL so that stakers can continue using their tokens to experience the DeFi ecosystem. Users can deposit their SOL using Steakwallet via Lido to receive stSOL, which Lido automatically delegates to validators on the Solana network.

 
What is the Solana blockchain and what makes it unique?

Solana is a high-performance, open source blockchain that allows builders around the world to create decentralized applications with a focus on scale and speed. Solana is one of the new "Layer 1" blockchains aiming to make crypto networks faster and more scalable. Solana uses a combination of Proof-of-Stake (PoS) and a new mechanism called “Proof-of-History.” Proof-of-History is designed to keep time between computers on a decentralized network without all the computers having to communicate about it and come to an agreement. Proof-of-History creates a historical record that proves that an event has occurred at a specific moment in time, which is different from most other blockchains in which block producers (validators) must communicate with each other to produce blocks and synchronize the state of the network. Solana side-steps this communication requirement and, therefore, can produce blocks much faster: the key to handling more transactions as the network scales. For a deep dive you can take a look at the Proof-of-History whitepaper.

 

While the idea and initial work on the Solana project began in 2017, Solana was officially launched in March 2020 by the Solana Foundation with headquarters in Geneva, Switzerland. With Solana’s hybrid protocol allowing for significantly decreased validation times for both transaction and smart contract execution, as well as cheaper fees – Solana managed to attracted a lot of interest from traders, builders and institutional investors alike, as Ethereum fees skyrocketed in 2021.

Why should I liquid stake my SOL?

Staking your SOL helps secure the Proof-of-Stake (PoS) network. Further, most PoS blockchains are initially inflationary in nature, so staking your SOL prevents you from getting inflated out of your position as you earn rewards for helping secure the network and validate transaction.

Liquid staking your SOL allows you to still have access to your SOL tokens (in the form of stSOL) so that you can continue to use your tokens for other DeFi activities like engaging with dApps and lending!

What happens when I liquid stake my SOL?

As Solana utilizes a Proof-of-Stake consensus mechanism, you can delegate an amount of SOL to a "validator", making you the "delegator". Validators on the Solana blockchain (and most other PoS blockchains) validate the network by approving transactions. The more SOL a validator holds the more powerful they are and the more "vote" the have in the network, which allows them to validate more transactions, thus earning more rewards. By delegating your SOL, you trust the selected validator to be a good network participant. From the earned rewards, the validator gives a certain percentage (stipulated by the network) back to the delegators that have delegated (staked) their SOL to them.

 

With liquid staking via Steakwallet, you will be delegating your SOL to validators and, you will recieve stSOL in return! Lido allows you to delegate your SOL to a pool of respected validators to earn rewards. From the earned rewards, the validator pool gives a certain percentage (stipulated by the network) back to the delegators (in this case holders of stSOL) that have delegated (staked) their SOL to them via Lido & Steakwallet.

When using Lido, users receive secure staking rewards in real-time, allowing for participation in the securing of Solana without the associated risks and downside potential.

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How much can I earn from liquid staking my SOL?

At the time this post was published, the APY (Annual Percentage Yield) is: 5.44%.

 

For the most up-to-date rewards rate, you can check the Steakwallet app.

What is the minimum amount of SOL I can stake?

The minimum amount needed to stake is 0.05 SOL. This is enough SOL to ensure you can stake successfully, as well as pay the Solana staking and unstaking network transaction fee.

How do I liquid stake my SOL?

You can choose how much of your SOL you want to delegate to the LIDO validator pool. You can stake any amount of SOL, for which you receive stSOL tokens.

Your stSOL balance is updated every few minutes to reflect your SOL staking rewards. Your stSOL balances can be used like regular SOL to earn yields and lending rewards. This is different from traditional staking where your assets are locked up and can’t be used while earning staking rewards.

Note: Make sure you have enough SOL in your wallet to pay for network transaction fees.

What validator is my SOL staked to?

Currently, if you stake your SOL with Steakwallet your stake gets delegated to a pool of validators selected by the Lido DAO. Among them are companies such as Chorus One, Figment, StakeFish, Chainnode and more.

How do I unstake my SOL?

You can unstake or trade your liquid asset at any time. To unstake, you can redeem your stSOL back for SOL.

Check out the introductory post from the Chorus One team to learn more.

When will I start earning rewards?

When you start staking your SOL, you will start earning right away. Rewards are automatically credited to your deposit every few minutes.

How do I claim my staking rewards?

Stakers earn their rewards in the form of appreciated stSOL automatically. No manual claiming is necessary.

Does Steakwallet take a cut of my rewards or charge a fee?

No. Steakwallet never charges a fee on your staking rewards.

Is SOL liquid staking safe?
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