Solana, the native token of its blockchain powerhouse, seems to be on an inexorable rise with an unprecedented momentum, having risen from its lows of $8 back in November 2022 to outperform many other cryptocurrencies in the market. The Solana blockchain doesn’t just promise rapid transactions and scalability; it also offers a dual benefit of fortifying the network and yielding passive income through staking. With its innovative Proof-of-Stake (PoS) mechanism, augmented by the Proof-Of-History (PoH) protocol, Solana redefines the landscape for crypto enthusiasts, offering quick transaction sequencing and cost efficiency. In this article, we’ll uncover the intriguing world of Solana staking and how to get started.

The SOL Staking Ecosystem: A Quick Overview

Solana’s Delegated Proof-of-Stake (DPoS) approach involves users staking their SOL tokens to participate in the consensus process. Validators, responsible for confirming transactions, prioritize based on their staked SOL. It’s a system that not only secures the network but also rewards active participants.
SOL, the native utility token, is versatile, serving as the currency for transaction fees, network validation, and staking.

Ways To Stake SOL

Apart from HODL-ing SOL and benefiting from its price appreciation, SOL can be staked to generate compounding interests which add up over time. There are many ways of doing so, which can be broadly categorized into staking via hot or cold wallets.

Hot Wallets

Cryptocurrency exchanges and 3rd party custodians offer lucrative returns on your SOL tokens, apart from providing great convenience and liquidity. The intuitive and user-friendly interfaces of these platforms ensure ease of access and usability, facilitating transactions especially for newcomers. However, as the adage goes “not your keys, not your coins”, the risks of third-party custody cannot be overstated, as you are essentially entrusting your assets into the care of a fallible entity.
Among the many hot wallets in the market, few have withstood the test of time and have earned my ‘relative’ trust, such as

• Nexo — a centralized finance platform that primarily focuses on crypto borrowing services and offering high-yield savings accounts for a wide range of cryptocurrencies such as Solana
• Binance — the largest cryptocurrency exchange in the world, that isn’t devoid of its fair bit of controversies in the realm of cryptocurrencies
• Bake
• Kucoin
• Bitget
• HTX — formerly known as Huobi
• MEXC

Nonetheless, it is noteworthy that every one of the above has had its own respectable share of FUD, which is inevitable given the air of distrust brewed by the downfall of one too many a centralized exchanges in the past year such as FTX, Celsius and the likes. As such, it goes without saying that due diligence and caution has to be exercised before investing in any of these platforms. If peace of mind is your priority, cold wallets are the preferable option.

Cold Wallets

Holding your cryptocurrency assets in cold storage is the epitome of digital security — however your coins are only as secure as your keys, for which you are responsible to safeguard.
While there are numerous platforms available, my favourite wallet for staking SOL is Exodus, which runs on desktop/ mobile devices.
Exodus offers the ability of staking SOL at an enticing 7% APY, while keeping your private keys safe. While the keys are stored offline, do note that however any malicious codes or viruses on your device may compromise these keys, hence rendering them vulnerable to interception by adverse parties over the internet. As such, the ‘cold storage’ of such private keys is only as good as it is segregated from the internet, which is often the case difficult to do — that is, unless you have an offline device solely designated for this purpose, for instance.
As such, the true and ultimate form of cold wallets that are absolutely devoid of contact from the internet are hence hardware wallets such as Ledger. For those with substantial holdings, the security of a hardware wallet is strongly recommended.

How To Earn Cryptocurrencies With Cold Wallets: An Introduction To Cold Staking

Earning and Managing Rewards

Earning rewards from your staked SOL is seamless. Rewards are automatically claimed and added to your balance at the conclusion of each epoch, which spans 4 to 8 days. However, it’s essential to remain cautious, as if a validator faces a slashing event, it can impact all those who’ve delegated their stakes to that validator. To mitigate this risk, spreading your stakes across multiple validators is a wise move.

Unstaking SOL: What You Need to Know

Unstaking is the process of withdrawing staked SOL from the network. When SOL is unstaked, it becomes available for transfer or sale, but it is also subject to a cooldown period of to 3 days during which it cannot be used.

Final Thoughts

Solana’s staking mechanism offers both financial rewards and active network involvement. As with any crypto venture, it’s critical to stay informed and maintain a diversified approach to minimize risks. By embracing Solana staking, you’re not just maximizing your passive income but contributing to the vibrant and secure Solana ecosystem. Start your Solana staking journey today and unlock the potential of your crypto holdings!
You may also be interested in:

How To Earn Bitcoin While You Sleep: The Art Of Trade Automation With Trading Bots

Profit from price fluctuations in the market by seamlessly buying low and selling high with a trading bot to generate…
cybery.medium.com

10 Money Making Passive Income Applications To Install On Your Device!

Turn your internet into cash! Leverage the power of your internet bandwidth to generate an effortless stream of passive…
medium.com

8 Keys To Trading Success That We Choose To Ignore

Trading is a game of mental resilience and discipline. These simple yet often forgotten tips are vital to ensure…
cybery.medium.com

★Free apps to earn money without any capital!★
🎁 Honeygain A passive income app to earn money off your unused internet bandwidth. Get $5 for free, no investment required.
🎁 Peer2Profit A passive income app to earn money off your unused internet bandwidth.
🎁 IPRoyal Pawns A passive income app to earn money off your unused internet bandwidth.
🎁 EarnApp A passive income app to earn money off your unused internet bandwidth.
🎁 JumpTask Earn free crypto when you complete microtasks!
🎁 CryptoTab Earn free Bitcoin while surfing the internet!
🎁 Bitcoin Faucet Sites: FreeBitco.in, Cointiply
🎁 StormX: Earn crypto as you shop online!
★Cryptocurrency Investment/ Trading Platforms★
🎁 Bake A one-stop investment platform that bakes passive cashflow at APYs of up to 100%! Get a $50 bonus in DFI with a $50 deposit.
🎁 Nexo An advanced, regulated digital assets institution offering instant crypto loans, daily earning on assets with APYs of up to 36%, an exchange, with services in 40+ fiat currencies in more than 200 jurisdictions. Get a $25 bonus with a $100 deposit.
🎁 Binance The world’s largest cryptocurrency exchange that needs no introduction!
🎁 Bitget A leading cryptocurrency exchange offering free advanced trading bots and copy trading.
🎁 Kucoin An expansive cryptocurrency exchange, with interesting offerings like staking, free trading bots and bitcoin cloud mining services.
🎁 HTX A cryptocurrency exchange with diverse offerings, free airdrops and trading bots.
🎁 MEXC A cryptocurrency exchange with interesting listings and frequent airdrops from holding the MX token.
🎁 Crypto.com A cryptocurrency exchange based in Singapore. Get $25 in CRO on staking for a Ruby card.
🎁 TradingView An invaluable charting platform for various markets. Get up to $30 discount off a paid plan here!
★Cryptocurrency Trading Bots★
🎁 3Commas A cryptocurrency trade management platform offering DCA bots, Grid bots, Options bots, Futures bots, HODL bots, Scalper Terminal, and full Portfolio management all from a single convenient interface.
🎁 Jet-bot An advanced spot and futures trading bot with Copy Trading functionality. 3-day trial period available with demo account.
🎁 Pionex A free multifunctional arbitrage trading bot that automates the process of buying low and selling high, 24/7.
🎁 Wundertrading An automated cryptocurrency trading bot offering a 7 day trial period with full functionality.
🎁 One Click Crypto An AI bot powered by neural networks that manage your cryptocurrency portfolio on autopilot.
★For Malaysian investors★
🎁 Luno Get a RM75 bonus in BTC with a RM250 purchase of BTC!
🎁 Stashaway Get free investing for 6 months!
🎁 Wahed code ‘KENLIE1’ RM10 signup bonus!
🎁 Capbay P2P code ‘8879c6’ RM100 signup bonus!
🎁 Versa Get a RM10 bonus with a RM100 deposit!
🎁 KDI Get a RM10 bonus with a RM250 deposit!
🎁 Klook Get a RM15 signup bonus!
Connect with me Medium | Read.cash | YouTube | Twitter

This article was originally my Medium blog on 2nd November 2023