Staking Solana: Your 2025 Guide

Zac McClure
ByZac McClure, MBAReviewed byAlex MilesUpdated on October 29, 2024 · minute read
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  • Staking Solana allows you to earn rewards while helping to secure the network. However, it carries risks like the potential slashing of your stake.

  • Understanding the tax implications of staking Solana is essential, as rewards are generally considered taxable income.

What is staking Solana?

Staking Solana involves delegating your SOL tokens to a validator who participates in securing the network. Doing so, you help ensure the integrity of Solana's Proof-of-Stake (PoS) consensus mechanism while earning rewards for your contribution.

This process doesn't lock your tokens away in a separate location—you retain control over them. However, your tokens will be inactive for the staking period, meaning you cannot spend or transfer them while they are staked.

Understanding Solana staking

When you stake Solana, you lend your tokens to a validator responsible for processing transactions and maintaining network security. In exchange, you receive a portion of the validator's rewards, which are distributed based on the total amount staked and other factors, such as validator performance.

Rewards are typically paid out every epoch, which lasts about 2.5 days on Solana. Validators charge a commission on your earnings, so selecting a reliable validator is essential to maximize your returns.

How risky is staking Solana?

While staking Solana offers potential rewards, it has risks. The main risk is slashing, which occurs when a validator engages in malicious behavior or fails to meet performance standards. As a penalty, a portion of your staked SOL can be forfeited.

Additionally, staking requires that you lock your funds for a specific period, which may impact liquidity. If the price of SOL drops while your tokens are staked, you may miss selling opportunities.

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Is Solana staking worth it?

Staking Solana can be worth it for those who believe in the network's long-term value and want to earn passive income. The rewards are generally attractive, especially for those who select a validator with low fees and strong performance metrics.

Before staking Solana, you should weight risks and ensure you are comfortable with the lock-up period and the potential for slashing. You should also consider your personal financial goals before committing to staking.

How much do you earn staking Solana?

The amount you earn from staking Solana depends on several factors, including the annual percentage yield (APY) offered by the validator, the total amount of SOL staked, and the validator's commission. On average, stakers can expect to earn between 5-7% annually.

Solana staking rewards calculator

To estimate your potential rewards when staking Solana, use a dedicated calculator tool like the staking rewards calculator. Input the amount of SOL you plan to stake, the validator's commission, and other details to get a clear projection of your earnings.

Looking to calculate your crypto profit? Try our free crypto profit calculator.

Tax implications when staking Solana

Staking rewards are generally considered taxable income. You must report them on your tax return. The value of the rewards is based on the price of SOL at the time they are distributed. For more details on the tax implications of staking Solana, refer to our crypto tax guide.

International taxpayers can refer to our helpful country guides for more information about staking taxes outside the US.

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How to choose the right Solana staking method

Choosing the best Solana staking method for your goals depends on risk tolerance and technical expertise. You can stake through custodial platforms, where a third-party provider manages your staking, or use a non-custodial wallet, which gives you complete control but requires more involvement.

Each option has trade-offs, so evaluating factors like validator reputation, fees, and network participation is essential when deciding.

Learn more about crypto staking taxes.

How to set up a validator node

Setting up a validator node on Solana requires technical know-how and a significant investment in hardware. Validators need to maintain uptime and manage resources to remain profitable. Additionally, validators must stake a reserve of SOL to be eligible for rewards.

While the rewards can be lucrative, running a validator node requires ongoing maintenance and monitoring to ensure optimal performance.

Where is the safest place to stake Solana?

The safest place to stake Solana depends on your preference for control versus convenience. Non-custodial wallets like Phantom and Solflare offer greater control over your funds, but custodial services like Binance or Kraken provide a hands-off approach with added security features.

Choosing a reliable validator is critical to ensuring the safety of your staked SOL. Always verify the validator's track record and reputation before delegating your tokens.

The best Solana staking platforms

Some of the best Solana staking platforms include Binance, Kraken, and Coinbase for custodial staking and non-custodial wallets like Phantom and Solflare. These platforms offer competitive rewards and are easy to use, making them ideal for beginners and experienced stakers.

Staking via non-custodial wallets

Staking via non-custodial wallets like Phantom or Solflare lets you fully control your SOL and private keys. You can choose your validator and manage your staking account directly from the wallet interface, giving you a more hands-on approach to staking.

While this option requires more responsibility, it is often favored by users who prioritize security and control over convenience.

Staking via custodial wallets

Custodial wallets or platforms such as Binance and Kraken make staking Solana easier by handling the technical aspects. With custodial staking, the platform chooses the validator, and you only need to deposit your SOL to start earning rewards.

This option is ideal for those who want to stake without managing the technical side of things, though it comes with slightly higher fees in exchange for convenience.

Solana staking FAQs

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Zac McClure
Zac McClureCo-Founder & CEO at TokenTax
Zac co-founded TokenTax after his career in international finance and accounting at JPMorgan, Imprint Capital and Bain. He has worked in more than half-dozen countries and received his MBA from the UPenn Wharton School.
Alex Miles
Reviewed byAlex MilesCo-Founder at TokenTax
Prior to TokenTax, Alex worked as a Product Designer at Dropbox and before that Readmill (acquired by Dropbox). He holds a BS in Digital Information Design - Interactive Media from Winthrop University.

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