Overview
Staking in the Solana proof-of-stake (“PoS”) blockchain network (“Solana”) is done through a process referred to as “delegation,” whereby a tokenholder assigns tokens to a validator node (“validator”). In the Solana network, holders of the Solana native token, SOL, engage in the staking process through delegation to validators. SOL enables transaction fee payments, staking for network security, and governance participation.
By committing SOL to the network’s validation process, SOL holders stake, as commonly inPoS networks, to help secure the Solana network, contributing to its integrity. Solana also features a unique proof-of-history (PoH) mechanism that enables the integration of historical records (timestamps) in the blockchain data that prove an event occurred at a specific moment in time. By using Verifiable Delay Functions (VDFs), PoH can efficiently and transparently timestamp transactions. This hybrid mechanism of PoS and PoH improves the time it takes to confirm the order of transactions, allowing for high throughput on the Solana network.
This post provides a technical step-by-step explanation of how Solana staking works, covering key points such as staking SOL through validator delegation, earning and receiving rewards, and, finally, un-staking SOL and withdrawing it. This post also explores Solana’s staking process and the ways that ownership and control of staked SOL are separated from validator operations.
1. Staking SOL and Delegating to Validators
In order to begin staking on Solana, participants (“stakers”) need to hold above the 0.01 SOL minimum balance in their wallet that is necessary to pay the network fee. They can then stake any additional amount of SOL by delegating it to a validator of their choosing. This works through the process of the tokenholder selecting a portion of SOL in their wallet and moving it to a “stake(d) account” that they delegate to a validator. In order to delegate SOL to multiple validators, one would move portions of SOL to various staked accounts, and delegate each account to a chosen validator. The SOL in the staked account is committed to the validator – i.e., it is “locked up”. Nevertheless, delegation of SOL to a validator does not transfer ownership of the SOL; the staker retains full control and can un-delegate their SOL at any time.
Stakers earn rewards. However, the staked SOL must become fully “active” to start earning rewards. Solana only allows state changes to take effect upon epoch boundaries, so newly delegated tokens during an epoch are considered “activating” (warmup period) until the beginning of the next epoch (∼ 2 days). Additionally, there is a limit on how much total staked SOL can become effectively active in a single epoch to prevent large sudden changes in stake across the network as a whole, so the duration of the warmup period is also dependent on the behavior of other network participants and can take several epochs.
2. Validator Operations
Validators in Solana work to verify and settle transactions. Thereby, they play a critical role in securing the network and ensuring the integrity of transactions by proposing and attesting to blocks, and finalizing new data added to the blockchain. Individual validators approve transactions on the Solana blockchain. In order to do so, they are dependent on the amount of SOL delegated to them. The more SOL that is delegated to a validator, the more opportunity the validator has to validate transactions, and the more rewards it earns. Rewards are earned in the network’s native token, SOL, and are distributed, minus the validator’s fees, to the stakers whose SOL helps the validator participate. The delegation process facilitates accumulation of SOL for validators, and thus allows for more validators. . Thereby, the number of validators in the Solana blockchain grows based on having additional stakers and staked SOL active in the network. Although there is no minimum amount of SOL required to run a validator apart from 1.1 SOL to pay the transaction fee, it only makes economic sense to run a validator on Solana if you receive a substantial amount of SOL delegations. It takes extensive equipment, time and technical expertise to run a validator, so that cost can only be covered through having substantial SOL delegations. Validators also benefit from the amount of SOL delegated to them by giving them additional “stake weight” — a metric used to determine the validator’s place in the queue of validators waiting to process transactions; the more SOL staked, the higher chance of being selected to process transactions. Validators are incentivized to process transactions (and do so correctly) because they earn rewards from the network for doing so, as discussed below, and stakers are incentivized to delegate stake to validators because they receive their portion of the rewards earned. The following section explains staking rewards on Solana.
3. How Rewards are Earned and Received
Staking rewards on Solana are determined by several factors, including validator uptime, performance, and commission rates. Validators receive rewards primarily through two sources: inflationary rewards and transaction fees. Inflationary rewards follow Solana’s inflation schedule and originate from newly minted SOL, distributed as an incentive for securing the network. This is the primary source for rewards distribution. Additionally, validators earn a portion of transaction fees, though these remain minimal due to Solana’s high network efficiency – often well below one cent per transaction. As mentioned in the section above, stakers receive staking rewards proportional to their stake, after validators deduct their fees.
Staked SOL does not immediately begin earning rewards, as there is a warmup period (until full activation) as described in the first section, and a waiting period. If a stake activation takes multiple epochs, the portion of stake that becomes fully active at the first epoch boundary is eligible for rewards, while the remaining portion that is still activating is not yet eligible for rewards. Rewards typically start accruing two epochs after the stake becomes active. From that point onward, staking rewards are automatically distributed at the end of each epoch and added to the staked balance, increasing the amount that is earning rewards. Solana’s system does not require manual claims, as Solana’s staking mechanism seamlessly compounds rewards. This feature enhances long-term yield but makes tracking the exact amount of earned rewards less straight-forward.
At any point during the staking process, the delegation can be ended without forfeiting previously earned rewards. Solana integrates all staking rewards within its staking mechanism, streamlining the reward distribution process. The next section explains in detail how the un-staking and withdrawal process works.
4. Unstaking SOL and Withdrawing
The process of un-staking mirrors the initial staking steps. Stakers can choose to deactivate their stake at any time, but there is a cooldown period that is tied to the start of the next epoch as well as the amount of tokens un-staked at the same time. Once the cooldown period has ended, the SOL is unbonded and becomes accessible to the original delegator. The cooldown period is further influenced by Solana’s network-wide staking limits. The protocol enforces a rule that no more than 25% of the total active stake can be deactivated within a single epoch. This safeguard prevents sudden fluctuations in the network’s security and staking distribution. If the amount of stake being deactivated in a given epoch exceeds the 25% threshold, only a portion of the total stake will complete its transition at the epoch boundary. The remaining stake remains in a pending state and must wait until the next epoch boundary to finalize its status.
Once the SOL (initial stake + rewards) is fully deactivated, it remains in the staked account until withdrawn. The SOL appears under “Available Withdrawals” in the staked account, at which point it can be moved back to the individual’s original self-hosted wallet by selecting “Withdraw” in the staking interface.
Staking in Solana also follows a unique structure in which each separate staking transaction creates a new stake account. Additional SOL staked later is not automatically merged with an existing stake account but instead forms a separate account and needs to be separately delegated, or brought into the same state as another staked account and the accounts are actively merged. For example, if an initial stake of 2 SOL is later supplemented with an additional 3 SOL, generally, two independent stake accounts will exist – one holding 2 SOL and another holding 3 SOL – rather than a single account containing 5 SOL. Consequently, un-delegating staked SOL must be done individually for each stake account, as there is no option to un-stake all delegations at once. However, it is possible to split a staked account and continue to un-stake partially from that account.
5. Separation of Ownership from Validator Operations
Solana’s staking architecture allows for a clear distinction between the ownership of staked SOL and the operational control of validator nodes. This means that a SOL holder can stake their tokens with a validator without transferring custody or control of their funds. This separation is crucial for maintaining a decentralized and secure staking environment, where stakers retain full authority over their assets while benefiting from validator operations.
With native staking, a staker selects a validator and delegates their SOL directly through a Solana-compatible wallet. The staker remains the sole owner of the staked SOL and can choose to redelegate (requires un-delegating first) or to un-stake at any time. The validator, in turn, is responsible for maintaining uptime and performing consensus duties, earning rewards that are shared with the staker. However, validators typically charge a fee, as explained above, deducted from the staking rewards before distribution to staker.
For an often more automated and diversified approach, liquid staking protocols allow SOL holders to stake through a stake pool rather than choosing an individual validator. These protocols distribute stake across multiple validators, reducing the impact of any single validator’s performance. In return, stakers receive liquid staking tokens which represent their staked SOL and can be used in DeFi applications or traded without waiting for the completion of the otherwise standard cooldown period.
The various staking options available in Solana provide flexibility, allowing tokenholders to balance control, convenience, and liquidity based on their individual needs.
Conclusion
Solana’s staking mechanics involve:
- Delegating SOL to a validator via a compatible wallet or liquid staking protocol.
- Waiting for activation, which occurs at the next epoch boundary.
- Earning staking rewards, automatically compounded at the end of each epoch.
- Un-staking, which follows a cooldown period before funds become available for withdrawal.
Solana offers multiple staking options, including native staking, liquid staking, and staking through centralized exchanges, each catering to different levels of control, risk, and liquidity.
By understanding the mechanics of staking, reward distribution, and un-staking, SOL tokenholders can make informed decisions to optimize their staking strategy. As the Solana ecosystem continues to expand, staking remains a critical part of its decentralized infrastructure, ensuring network security, efficiency, and long-term sustainability.
