Proof of Stake – Staking Solana
Solana utilizes the PoS (Proof of Stake) consensus mechanism, which is different from Bitcoin’s PoW (Proof of Work) Both mechanisms make up avenues for investors to make money from cryptocurrency.
Proof of work entails showing a proof of work done in solving a complex mathematical puzzle for a fraction of the mined token. Proof of stake entails betting or staking your crypto for a return or gain.
Note that staking is a profitable as mining…with lesser cost. Asides from earning a passive income, by staking, you help make the blockchain secure and hack-resistance.
Staking Solana is straightforward like other cryptos that run on the PoS mechanism. Ripple, Cardano, Polkadot, and some other were built on the framework.
Cryptos like Bitcoin, Ethereum, Dogecoin, adopt the PoW which is costlier, energy-sapping, slower to mine compared to others, capital intensive, and more.
Key Takeaways
• Binance offers 50(+) staking products such as SOL for its users to enjoy free staking rewards by simply depositing and holding coins on Binance. Moreover, there are no fees involved when staking SOL tokens on Binance.
• It’s against the policy of FTX to allow US residents on their platform. In addition, they mainly focus on Asia and Europe. However, it’s up to you to use a VPN to try to surpass these restrictions.
• Users can also purchase new crypto because of Ledger wallet uses a built-in exchange feature. This feature uses a third party (Coinify) so buying comes at a cost: 4.5% credit card fees or 1.7% for bank transfers.
By staking your SOL tokens, you contribute your quota to the security of the network and earn rewards while doing so.
SEE ALSO: How Much Do Solana Validators Make?
SEE ALSO: How to Become a Profitable Solana Validator
SEE ALSO: How to Pick the Right Polkadot Validators
1. Binance
Based on daily (24h) trading volumes, Binance is the largest cryptocurrency exchange in the world. Also, it has millions of cryptocurrency traders using its platform daily. Besides trading, Binance offers several other feature-rich products, including custodian wallets, crypto margin trading, lending service, and earning rewards with staking.
Trading in Binance can be done with almost zero fees(0.075%). It will give you an additional 10% discount on fees for life.
At the time of writing, Binance offers 50(+) staking products such as SOL for its users to enjoy free staking rewards by simply depositing and holding coins on Binance. Moreover, there are no fees involved when staking SOL tokens on Binance.
Binance has an APY of 9.2%-30days staking period/9.9%-60days staking period with staking fees of 0.08%.
2. Kraken
Kraken is one of the most reliable and safest cryptocurrency exchanges out there and has been around for a while already.
Founded in 2011, Kraken is a US-based cryptocurrency trading platform available in 48 US states and 176 countries. Also, because of its safe reputation, the exchange data is being used as a ticker (BTC/USD) on the Bloomberg terminal.
The Kraken platform specializes in offering Bitcoin trading services for the beginner as well as the professional trader.
Besides trading in digital assets, it’s also possible to store your crypto in custodian wallets, crypto lending services, and staking cryptocurrencies.
Spot trading crypto (Bitcoin for example) gives you a fee of 0.16% and this value decreases when USD volume rises. Additionally, margin trading is even cheaper where the rate is set to 0.01%.
At the time of writing, staking crypto-like Solana can be done at Kraken in 10 different cryptocurrencies. The way this works is very simple and straightforward: buy the cryptocurrency you want to stake and transfer it to the staking wallet on the exchange.
Kraken has an APY of 6.5% on a yearly staking period with staking fees of 0.16%.
3. FTX
FTX is a brand new crypto trading company that has been growing very fast and is therefore the youngest option on the list. On their website they explain their mission:
FTX is a cryptocurrency exchange built by traders, for traders. FTX offers innovative products including industry-first derivatives, options, volatility products, and leveraged tokens. They strive to develop a platform robust enough for professional trading firms and intuitive enough for first-time users.
It’s against their policy to allow US residents on their platform. In addition, they mainly focus on Asia and Europe. However, it’s up to you to use a VPN to try to surpass these restrictions.
FTX has an APY of 8% on a yearly staking period with staking fees of 0.10%.
4. Ledger Nano hardware wallet
If you favor being in full control of your cryptos then the Ledger Nano hardware wallet should be it. Particularly, the Ledger Nano wallet is a USB storage wallet with Bluetooth connectivity available.
Also, this way it’s possible to store your cryptocurrencies offline which is the most secure option. Furthermore, the wallet enables users to perform a wide variety of functions, including sending and receiving bitcoin from blockchains or running third-party apps on the device.
Besides storing coins on the wallet, users can also purchase new crypto because of Ledger wallet uses a built-in exchange feature. This feature uses a third party (Coinify) so buying comes at a cost: 4.5% credit card fees or 1.7% for bank transfers.
Ledger Nano has an APY between 9 and 10% with a flexible staking period and staking fees between 1.7-4.5%.
SEE ALSO: How to Choose a Validator when Staking with Ledger
5. Atomic Wallet (Desktop and Mobile)
Atomic wallet supports a big number of operating systems: Window, Ubutu, Mac, Fedora, Debian, iOS, and Android, and over 300 cryptocurrencies. You can use it to manage Solana (SOL). The Android version (Desktop does not) seems to support the Solana staking with approx. 7% annual percentage yield.
The Atomic wallet is one of the first multicurrency wallets and can be used to manage and transfer a bunch of coins from different blockchains.
Atomic Wallet has an APY of 7% with a staking period of 90 days and a staking fee of 5%.
6. Exodus
This wallet has been there for a while and has a proven track record of being very secure. Therefore, the Exodus wallet allows you to store your crypto offline (with Trezor) and when needed, connect with their software wallet app.
Another interesting feature of Exodus is the number of cryptocurrencies (130) that can be stored in the app and offline.
Staking is also a feature of this wallet where currently 25 different cryptocurrencies are supported. Finally, staking Solana can be done here at an APY of about 6.13% with a year staking period and a staking fee of 5%.
SEE ALSO: How to Delegate Solana on Ledger with SolFlare
SEE ALSO: 7 Best Cloud Mining Contracts for Lucrative Returns
Frequently Asked Questions (FAQ)
1. Is it worth staking Solana?
Staking Solana is a great way to earn passive income in the form of staking rewards. Rewards are paid out in SOL.
You can view it as earning interest on your crypto holdings. With Solana, staking means you agree to lock up an amount of SOL that you choose for some time, during which it cannot be spent.
2. How often does Solana pay staking rewards?
Solana pays stake rewards once per epoch. An epoch is approximately 2 days long. Rewards accrued in a given epoch are issued to all validators and delegators in the first block of the following epoch.
3. How does proof of stake work?
In a proof-of-stake model, owners put up their tokens as collateral. In return, they get authority over the token in proportion to the amount they stake.
Generally, these token stakes get additional ownership in the token over time via network fees, newly minted tokens, or other such reward mechanisms.
4. Is Solana the fastest Crypto?
With a processing speed of over 50,000 transactions per second, Solana is one of the fastest cryptocurrencies on the block.
Final Thoughts
Staking Solana has been made seamless through wallets such as Atomic wallet that come with different features suitable for individuals who have an interest in Solana and cryptocurrency in general.
Read More
