On Solana, staking isn’t just a buzzword—it’s the secret sauce keeping the network fast and secure.
And if you’re not into locking up your SOL like it’s 2021, there’s liquid staking—staking, but make it flexible.
In this guide, we’ll break down both native and liquid staking, outline your available options, and show you how to earn extra yield and rewards on your SOL.
Let’s get started!
Staking on Solana
Blockchains such as Solana use a "consensus mechanism" called Proof of Stake (PoS) which is run by validators and ensures that all transactions are verified and secured.
As such, Solana allows individuals or entities—known as "stakers"—to lock up a certain amount of SOL directly with validators as collateral to support its consensus mechanism.
This process is referred to as "staking."
In return for their participation, stakers can earn yield on their staked SOL, in addition to staking rewards. Staking rewards are typically distributed in the form of additional tokens. The amount of rewards you earn may depend on factors such as the duration of your staking and the amount of SOL you've staked.
This economic incentive is pivotal, as it enables more high-quality validators to be set up, which in turn can enhance the network's security and efficiency.
Solana liquid staking
Liquid staking is a concept that combines the benefits of staking with liquidity.
As mentioned above, traditional staking requires stakers to lock up their SOL directly with a validator. This means that their staked tokens are not readily available for trading, spending, or transferring.
Liquid staking aims to address this liquidity issue by allowing staked assets to be used in various ways while still participating in the staking process.
When participating in liquid staking, holders stake their SOL to a smart contract or staking pool—instead of directly to a validator.
In return for staking their tokens, participants receive a different type of token that represents their staked SOL. This new token, referred to as Liquid Staking Token (LST), can be traded, used in DeFi applications, or transferred—all while earning yield and staking rewards.
In essence, this provides additional flexibility and liquidity for token holders.
Solana liquid staking providers
Different blockchain networks and DeFi protocols may offer liquid staking solutions with varying features and functionalities.
Let’s have a look at some notable liquid staking options on Solana: Jito, Marinade, Blaze, and Sanctum.
Jito
Before we dive into Jito, it’s important to cover maximal extractable value (MEV).
MEV refers to the maximum amount of value a validator can make by including, excluding, or changing the order of transactions during the block production process. As such, MEV encompasses both the rewards a validator can earn through transaction fees and any additional profit they can gain through their control over the transaction order.
So, how does Jito fit in?
The Jito stake pool exclusively delegates to validators operating the Jito-Solana validator client, which helps minimize the negative effects of MEV—e.g. spam trades and failed transactions—while maximizing its benefits—e.g. network efficiency and additional profits.
Consequently, by staking with Jito, you receive the yield-bearing JitoSOL LST, which accumulates both staking and MEV rewards over time.
Marinade
Founded in March 2021, Marinade was Solana's first-ever native liquid staking solution.
Generally, Marinade offers two staking options: liquid staking and native staking.
- Liquid staking: On Marinade, you allocate your SOL to a stake pool and receive mSOL. While your staked SOL earns rewards (MNDE tokens) and yield—which is distributed directly into the price of mSOL—you can deploy your mSOL as collateral in various DeFi protocols such as Kamino and Drift.
- Native staking: Marinade Native is an alternative to liquid staking that enables users to benefit from an automated delegation strategy without using any smart contract. For more on how Marinade Native differs from liquid staking, read Marinade's guide.
Blaze
At its core, the Blaze stake pool works the same as the ones from Marinade and Jito mentioned above.
With that said, there are some differences:
- Blaze features the largest validator set of any Solana stake pool (200+ validators).
- Blaze leverages the official stake pool smart contracts from Solana Labs, which is heavily audited.
- Blaze pioneered the Custom Liquid Staking protocol, which enables you to liquid stake to specific validators or groups of validators.
When staking with Blaze, you don't receive mSOL or JitoSOL, but yield-bearing bSOL and the corresponding rewards.
Sanctum
Apart from native and liquid staking, customized staking—powered by Sanctum—is another option available on Solana.
Sanctum allows for the creation of custom LSTs, enabling projects to use LSTs as a delivery mechanism for extra yields (e.g. laineSOL), for NFT whitelist spots (e.g. pathSOL), or for subscription services (e.g. alphaSOL). The main use case of Sanctum, however, is the creation of validator LSTs such as laineSOL, bonkSOL, jucySOL, compassSOL, and many more. At their core, validator LSTs combine all the benefits of native staking (e.g. zero fees; choosing your preferred validator) and the benefits of liquid staking (e.g. instant liquidity; usage throughout Solana DeFi).
Additionally, Sanctum has built a router that allows anyone to buy, sell, and trade Solana LSTs instantly and with limited slippage—regardless if they’re established ones, such as mSOL and JitoSOL, or lesser known ones, such as pathSOL and alphaSOL.
Potential risks of liquid staking
Although liquid staking on Solana offers the enticing prospect of earning extra yield and rewards, it might also introduce a set of risks that you should carefully consider.
- Liquidity constraints: While liquid staking aims to provide flexibility, the actual liquidity of derivative tokens can vary. In times of high demand or market stress, converting LSTs back to SOL might be challenging without incurring losses, particularly if the liquidity pools are shallow.
- De-pegging risks: The value of liquid staking tokens is designed to mirror the value of the underlying SOL tokens. However, during periods of market volatility or low liquidity, these tokens can de-peg, meaning their market value diverges from the expected value. Such de-pegging events can result in losses, especially if you need to convert your LSTs back to SOL during these periods.
- Smart contract vulnerabilities: Liquid staking protocols operate through complex smart contracts. Any bugs or vulnerabilities within these contracts can be exploited, potentially leading to significant financial losses. For instance, flaws could allow unauthorized minting of tokens or unauthorized withdrawals of staked SOL, compromising user funds.
- Regulatory uncertainty: The regulatory landscape for liquid staking is still evolving. Changes in regulations could impact the operation of liquid staking protocols, potentially affecting the availability of services or the legal status of the derivative tokens. Always make sure to stay informed about regulatory developments in your jurisdiction to mitigate unforeseen legal risks.
How to liquid stake with Phantom
With Phantom, you can easily stake your SOL natively or opt for liquid staking—whatever suits your strategy.
You can also seamlessly swap your natively staked SOL to JitoSOL.
Native and liquid staking with Phantom
- Open your Phantom wallet
- Navigate to the Solana (SOL) asset tab and click “Start earning SOL”
- Choose between Native staking or Liquid staking
- If you choose Native staking, you’ll be prompted to search for and select a validator to stake with
- If you choose Liquid staking, your SOL will be converted into JitoSOL, which will remain in your Phantom wallet
- Complete the staking steps and confirm the transaction
- Once confirmed, you’ll see your staked SOL position under Native staking, or your JitoSOL will appear alongside your other assets in your wallet
Swapping native stake to liquid stake with Phantom
Unstaking, the process of redeeming your native i.e. locked SOL, might take some time.
If you’re in a hurry and don’t want to wait, you can swap your native SOL stake to JitoSOL—here’s how to do it:
- Open your Phantom wallet
- Navigate to the Solana (SOL) asset tab and click “Your stake”
- Next, select “Convert to JitoSOL”, complete the conversion steps, and confirm the transaction
- Once confirmed, your JitoSOL will appear alongside your other assets in your wallet
For more details, make sure to read our announcement here.
Trade liquid staking tokens with Phantom
- Log in to your Phantom wallet
- Select "Swap" and the token (e.g. SOL or USDT/C) you'd like to use in the swap
- Next, open the dropdown menu in the “You receive” section and enter the name of the LST you want to trade for (e.g. JitoSOL or mSOL) into the search bar
- After selecting your preferred LST, finalize your swap
How to share Solana liquid staking tokens with friends and family
Know someone else who might be interested in Solana LSTs?
You can share a simple token page with them so they can get involved!
Here's how:
- Open Phantom
- Search for your preferred LST
- Select the token
- Press the Share button
- Copy the link
- Send the link through your preferred app, such as iMessage, Telegram, Instagram, or others
For example, when you share this link, the recipient will receive the official JitoSOL token page from Phantom.
How to bridge tokens to Solana with Phantom?
If you’d like to bridge funds to Solana, use our very own Crosschain Swapper. With our Crosschain Swapper, you can bridge tokens across Solana, Ethereum, Base, Sui, and Polygon right in your Phantom wallet.
Disclaimer: This guide is strictly for educational purposes only and doesn’t constitute financial or legal advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.
