As the crypto market is swinging from new highs to new lows, there are many options where users can make a good profit. Staking SOL, for instance, is one of the most lucrative and beneficial things an individual can do in the present scenario.
This post will discuss why Staking SOL is important and how to stake SOL. By the end of this article, you'll be better knowledgeable about staking, know how to execute it, and be able to decide whether or not staking is right for you.
Did you ever think of contributing to protecting, democratising, and sustaining the Solana ecosystem while staking SOL? Imagine being such a valuable contributor in less than 5 minutes. Fortunately, this is doable, and tens of thousands of SOL holders do that. This method of assisting in the security of the Solana network and getting rewarded for doing so is termed "staking."
What is Crypto Staking?
Staking is simply depositing your tokens in a reward pool. Token holders assign their tokens to a validator during staking SOL. On the Solana network, validators process transactions. They keep a record of all transactions that have occurred on the network. Allocating SOL tokens to a validator to effectively scale the network is known as "delegation."
During SOL delegation, you communicate your level of trust in the validator to the network. The more SOL a validator has delegated to them, the more "evidence" the validator has for being trustworthy. This enables the validator to handle more transactions and receive staking rewards to distribute to its delegators.
While staking SOL, it is essential to understand that when you stake with a validator, you do not give up ownership of your SOL; you retain control over all of your SOL.
What Are The Present Staking Rewards?
Validators can expect to gain an APY of 6.7% for staking SOL to facilitate transactions and sustain the state network. On the other hand, Delegators might expect to earn a slightly lower income based on the validator chosen.
It is mainly because a portion of rewards from staking goes to validators as a validator commission. If you stake 1,000 SOL, you'll earn about 64.1 SOL over the next year. Based on SOL's 52-week high of $260.06, you would raise $26,006 for an annual profit of $1,666.99.
How To Stake Your SOL Tokens
Now that we've outlined staking and its benefits, let's look at how to stake it. There are currently two ways to stake SOL; a centralised exchange through a personal wallet or a liquid staking platform.
Staking SOL Through A Centralised Exchange
Centralised exchanges that offer staking rewards are highly recommended for beginners. The entry barriers in terms of knowledge and expertise are lower, making these platforms easy to use and eliminating the need to search for a suitable validator. Some unique aspects of the CEX are:
Features of CEX
- Centralised exchanges streamline staking; you need to sign up for staking on their platform.
- You may instantaneously choose to un-stake your tokens, as many exchanges allow that.
- The vast majority of CEXs are dependable and secure.
Staking SOL Through Liquid Staking Platforms
SOL token holders can stake their tokens utilising a liquid staking platform. It enables token holders to gain staking incentives while instantly "un-staking" their SOL. Stakers accomplish this by exchanging their SOL for a synthetic SOL token redeemable for an amount of SOL equal to the SOL and the staking benefits gained via staking.
Features of Liquid Staking Platforms
- You have all of the advantages of staking SOL with a dedicated wallet.
- You can un-stake your SOL deposits immediately.
- Returns on staking SOL from liquid staking platforms can be higher than those from several CEXs.
- SOL is pledged across numerous validators, reducing the volume of delegated tokens and the dangers involved with fewer validators.
Staking SOL helps keep the Solana blockchain secure and the network running smoothly. It is undoubtedly one of the most effective ways to support the Solana network.
Benefits of Staking SOL
Solana is designed to provide a secure and sustainable economy for users and facilitate the community's growth. There are many benefits of staking SOL. Some of the most notable include:
- Staking SOL allows you to earn rewards for locking up your tokens and helps to stabilise the token value and secure the network.
- Staking SOL helps to secure the network by verifying transactions. It also makes the network more efficient and reduces the risk of fraud.
- Staking SOL provides voting power that allows you to participate in important decisions about the future of the network.
Because Solana is an open and distributed network, it relies on validators to ensure its operations are authentic and verified. Staking is critical to Solana's Proof-of-Stake protocol, which aims to keep the network decentralised and highly operational.
Solana has been one of the biggest crypto surprises of 2021. Not only has its native SOL coin surged over 17,000% during previous year, but it has done so by acting as a safe haven from Ethereum's exorbitant transaction gas fees. It indicates that Solana's utility is paying off. Another way to increase applicability and value is to become a Solana stakeholder.
Because Solana is a proof-of-stake network, auditors, not miners, protect the network. As a result, the staking method allows you to collect rewards without requiring any hardware or money! Stakers are highly rewarded for their contribution to the Solana network, with a limited supply of just 519,387,431 SOL and an ever-increasing demand for staking rewards.
By staking SOL in 2022, you will become a member of one of the world's newest and most promising blockchain networks. Not only do you get compensated, but you also contribute to the fastest, most agile, and most dynamic blockchain ecosystem.
Solana is a notable competitor to Ethereum. With all the money and general interest it's receiving, it has bright future potential that will appeal to crypto enthusiasts. And as you can see, staking SOL is pretty easy, so there's no reason not to try it. Follow the steps in this post, and you should start earning awards very soon.
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