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What is Staking ?
Staking is a process that allows crypto holders to earn rewards by participating in the network's operations. On the Solana blockchain, staking SOL is a way to support the network's security and efficiency while earning passive income (additional SOL).
At its core, staking involves locking up a certain amount of crypto to a validator. In return for this service, stakers receive rewards, typically in the form of additional tokens. When you stake with a validator, you are delegating your SOL (which represents voting power) to him and you are helping him to validate transactions and secure the network. Put simply, you are saying that you trust the validator to do his job.
It is important to choose a good one to improve the network's security and efficiency but also to earn more rewards.
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Risks
Staking on Solana is considered "non custodial", which means that when you stake your SOL, you are not giving your keys to the validator. The validator will only be able to see your SOL, he will not be able to use it or transfer it to another address. You are free to withdraw your SOL at any time but you will have to wait for a cooldown period of some days.
There is currently no slashing on Solana, which means that you will not lose your staked SOL if the validator has a malicious behavior. But you can lose a part of your rewards if the validator has a bad performance or a high commission.
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Native Staking
On Solana, users can stake their SOL tokens directly with a validator. To stake natively, you simply choose a validator, delegate your SOL to them, and start earning rewards. The rewards are distributed based on the validator's performance and commission.
You have different ways to do native staking, you can for example use a wallet like Solflare, Phantom or Ledger to stake your SOL.
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Stake Pools & Liquid Staking
Alternatively, users can participate in staking through pools and do what we called "liquid staking". It means that you will exchange your SOL for a token that will represent your staked SOL. This token can be used to earn rewards and you can also exchange it back to SOL. Unlike native staking, where funds are locked, liquid staking enables users to receive representative tokens for their staked SOL, which they can use in other applications or trade. Behind the scenes, the protocol will stake your SOL to a pool of validators and will handle the rewards distribution. While the risks are low, by doing liquid staking, you trust the protocol to do its job and to be able to give you your SOL back when you want. You may want to check the protocol's security before doing liquid staking.
If you want to learn more about stake pools & liquid staking, you can read this article.
You can find some tutorials for native staking and liquid staking on the left menu.
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Conclusion
Staking on Solana is a straightforward way to earn rewards while supporting the network. Whether you choose to stake natively with a validator or join a staking pool, you can participate in the Solana ecosystem and benefit from its growth by earning rewards.