What is Stake/Staking
Staking on Solana is how SOL holders help secure the network and earn rewards in return. Instead of using massive amounts of computing power like Bitcoin, Solana uses a Proof of Stake system where people commit their SOL tokens to support validators who process transactions and create new blocks.
The network runs on cycles called epochs, which last around 48hrs each. During an epoch, validators take turns proposing blocks - each turn lasts around 400 milliseconds, and there are 432,000 of these opportunities per epoch. When it's a validator's turn to lead, they bundle up transactions into a block while other validators check their work and vote on whether it's valid.
You don't need to run your own validator to participate. Most people delegate their SOL to existing validators, which means you're basically backing their operation with your tokens. In return, you get a share of the rewards they earn - which is around 7%. These rewards come from two sources: new SOL tokens created by the protocol (inflation)and transaction fees paid by users. Every few days when an epoch ends, rewards get distributed based on how well the validator performed and what commission they charge.
Running a validator isn't an easy endeavor. It requires serious hardware, technical knowledge, and a decent chunk of SOL to get started (around 5,000 to be profitable from day 1). Validators need to keep their systems running 24/7 because downtime means missed rewards and potential penalties. Right now, there are over 1,800 validators securing Solana, which helps keep the network decentralized and resistant to attacks.
Native Staking vs LSTs
When you stake SOL the traditional way, you pick a validator and delegate your tokens through your wallet application. Your tokens get locked up for one epoch before they start earning rewards, and you'll need to wait another epoch to unlock them when you want to stop staking. It's straightforward and secure, but your SOL is stuck during that time and you can't use it for anything else while it's staked.
Liquid Staking Tokens (LSTs) solve this problem. When you use a liquid staking protocol like The Vault ($vSOL), SolBlaze ($bSOL), Marinade Finance ($mSOL) or Jito ($JitoSOL), you deposit your SOL and get back a token (like mSOL or JitoSOL) that represents your staked position. This token grows in value over time as staking rewards accumulate. The big difference is you can still trade it. Want to use it as collateral for a loan? Go ahead. Provide liquidity on a DEX? No problem.
Behind the scenes, these protocols manage huge pools of SOL and spread them across many validators. They use different strategies to pick validators, balancing factors like performance, commission rates, and network decentralization. Jito takes things a step further by capturing MEV rewards (basically extra profit from transaction ordering), which can bump up returns beyond regular staking yields.
Choosing between regular staking and LSTs comes down to what you want to do with your SOL. If you're planning to hold long-term and want maximum rewards with minimal risk, native staking makes sense. But if you're active in DeFi and want to put your capital to work in multiple places at once, LSTs give you that flexibility. Many users actually do both-keeping some SOL in native staking for the security and simplicity, while using LSTs for the portion they want to stay liquid.
