Benefits of $SOL Staking
Staking SOL tokens on the Solana network offers several compelling benefits, including rewards and potentially governance rights. By staking tokens, users become eligible to potentially receive a portion of the newly minted SOL tokens as a reward for contributing to the networkâs security and validation process.
Their participation in staking help's is to secure the Solana network by increasing its decentralisation and making it more resistant to attacks or manipulation. Additionally, in some cases, staking tokens may grant voting rights, allowing users to participate in the decision-making process regarding the future development and governance of the Solana ecosystem.
What Are $SOL Staking Rewards?
Solana staking rewards are the incentives users may receive for participating in the networkâs validation process. These rewards are distributed in the form of newly minted SOL tokens, which are added to a userâs staked balance over time.
The amount of rewards earned is primarily determined by the following factors:
Staked Amount: The more SOL tokens a user stakes, the higher their potential rewards.
Validator Performance and Commission: The performance and reliability of the validator node a user chooses to stake with can impact their rewards. Validators with higher uptime and better performance tend to receive a larger share of rewards. In addition, the potential rewards received are a net of commission fees paid to the validators.
Network Participation: The overall participation rate of the Solana network also plays a role. If more token holders stake their tokens, the rewards are distributed amongst a larger pool of participants, potentially reducing individual rewards.
Itâs important to note that Solana staking rewards are subject to fluctuations based on network conditions and the overall demand for staking. Additionally, validators may charge a commission fee, which is deducted from the rewards before distribution to stakers.
How to Stake $SOL
Option 1: Selecting a Validator
For those who want full control over the staking process, download the Crypto.com DeFi Wallet, which is a non-custodial (also called self-custodial) wallet. Users select their own validator, with fees, returns, and slashing risk varying by validator. See below for more details on slashing.
To begin staking SOL tokens with self-custody, follow these general steps:
Open the Crypto.com DeFi Wallet extension.
Users need to ensure there is a sufficient amount of SOL tokens in their wallet to stake. SOL tokens can be purchased in the Crypto.com App and on the Exchange.
Research and choose a reputable validator node to delegate tokens to. Consider factors like their track record, commission fees, and overall performance.
Follow the staking process within the chosen wallet or platform, specifying the amount of SOL tokens to stake and the selected validator.
Users should keep an eye on their staked tokens and the rewards theyâre earning. Some wallets or platforms may provide dashboards or analytics to track a userâs staking progress.
