How to Stake SOL to Earn Rewards?

What is Solana Staking?

Solana is the 4th generation blockchain. It has solved the scalability and speed of blockchain. Solana uses the Proof of Stake based consensus, so you can lock in your crypto assets in the blockchain network for being selected as a validator to earn rewards. Moreover, to stake SOL can help to keep the blockchain network healthy--the stake each validator holds helps prove they are trusted to vote on transactions and confirm they are legitimate. For encouraging people to be a validator, the network will reward the validators based on the size of the stake, similar to the traditional bank interest income.

How does Solana Staking Work?

When you are staking Solana, you can be treated as a validator of the Solana network. When a message is sent from a user interface to the network, the first validation node that receives it verifies the message and adds a timestamp onto the message. This validator then forwards the data packet to the current block leader. They will organize all of the messages in order, based on when they were given. In short, your stake is just like a vote of trust that helps to confirm transactions on the Solana network.

How Much Can You Earn When Staking Solana?

The staking rewards are based on Solana's inflation rate, which will fall over time as the number of transactions on the network increases. Also, it depends on the amount of Solana you are staking, the more you're staking, the more Solana you will get. Solana's initial inflation rate is 8% annually, decreasing by 15% YOY, reaching a long-term fixed inflation rate of 1.5% annually. For example, if you stake 100 SOL, you can get 8 SOL for one year.

Is Solana Staking Safe?

• In technical, there exists a mechanism known as slashing on Proof-of-Stake networks. Slashing is any process by which some portion of stake delegated to a validator is destroyed as a punitive measure for malicious actions undertaken by the validator. This mechanism incentivizes validators not to undertake such actions, as less stake delegated to a validator means that the validator then accrues fewer rewards. Being slashed can also be seen as a reputational risk for retaining current or attracting potential future stakes. Slashing also poses a risk to token holders who could potentially lose some of their tokens if they have delegated to a validator which gets slashed. The presence of slashing could incentivize token holders to only delegate their tokens to validators they feel are reputable, and not to delegate all their tokens to a single or small number of validators. On Solana, slashing is not automatic. If an attacker causes the network to halt, they can be slashed upon network restart.
• Solana staking is pretty safe, while you are staking SOL, you remain in control of your coins, which means you can request a withdrawal back to your main wallet at any time.
• However, you shoulder notice some prominent risks in staking cryptocurrencies, such as volatility risks, validator risks, and server risks. You may also have to encounter issues of loss or theft of funds, waiting periods for rewards, project failure, liquidity risks, minimum holdings, and extended lock-up periods.

How to Stake Solana (SOL) with Phantom?

There are a lot of wallets that support Solana Staking, such as Phantom or Solflare, to make it simple, we will show you how to stake Solana with the Phantom wallet.

• Create a new Phantom wallet

Visit https://phantom.app/download and select your browser type. Follow steps in your respective extension store to add Phantom to your browser. After installing, you should see Phantom start up in a new tab:

If you are a brand new Solana user, select "Create New Wallet". If you are an existing Solana user coming from sollet, you can migrate your existing wallets to Phantom.

Store your "Secret Recovery Phrase" in a safe and secure location, it is the only way to recover your wallet. At no point will a member of the Phantom team ever ask you for this phrase. Whoever has access to this phrase has access to your funds. If you are using Chrome, it will be on the top right-hand side of your browser. If you don't see it look for a "puzzle piece" icon and click on it to access a list of installed extensions. There you should find Phantom, click on the "pin icon" to make it easier to find in the future.

• Deposit SOL

You can buy some SOL from exchanges first and then transfer it from the exchange to your wallet. First, you need to get your SOL address. To find your address, open up the Phantom wallet application.

Click "Deposit SOL" or "Receive" to find your wallet address.

Now hit the "copy" button. What you have copied is your wallet address where you can receive the Solana token. Now go back to the exchange you are using, and the "withdraw SOL" option or "Send / Receive" on exchange. You can find this on the "wallet" section in the exchange and the page where you purchased Solana. Once you find this feature, paste your SOL address you just copied from your Phantom wallet into the address bar. Enter how much SOL you would like to withdraw.

Then hit "Send now"! Afterward, check your Phantom wallet to see if the SOL is deposited.

• Staking Solana (SOL)

Once you have some SOL in your wallet, click on the Solana token balance in your wallet. Then click the "Start earning SOL" button.

Next, choose a validator to stake with.

Choose an amount and then click "Stake"!

All done! Now you are Staking Solana (SOL) successfully! Be patient for the rewards!

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