Recently at Step Finance we have decided to launch our own Solana Validator to do our part in helping to decentralize Solana’s network. We also figure it gives our community another avenue to rally behind and generate additional protocol revenue, which is then distributed to xSTEP holders.
In this guide we’ll explain how to stake your SOL with Step’s validator, provide some insights to help understand Solana validators and explore a ‘liquid staking’ option through SolBlaze.
Solana is a delegated proof-of-stake network, meaning you can stake your SOL tokens, or ‘delegate’ them to validators who are responsible for processing transactions, running the network and keeping it secure. For doing this, validators earn rewards in a similar fashion to how one might understand Bitcoin mining.
However, on a proof-of-work network like Bitcoin, miners earn rewards proportionate to the amount of mining hardware (hashpower) they have.
On Solana’s proof-of-stake network, the validators only require a single hardware setup, and the rewards they receive are proportional to the amount of SOL staked with that validator. In most cases, validators incentivize holders to delegate SOL to them by passing on a share of the rewards in order to grow their stake weight. In turn, this increases profitability of their validator setup, as a greater amount of SOL staked increases odds of block production, and thus, increases generated rewards.
Anyone can start a validator on Solana, and a higher number of validators around the world implies greater network health. More validators means more decentralization of block production, increased censorship resistance and greater overall security of the network.
Epochs are a length of blocks which defines the consensus algorithm on Solana. Typically they are around two days long. Epochs matter because during the crossover into a new epoch is when stake with a validator begins or ends and also when rewards are distributed to the validators.
For example, if a user decided to stake their SOL with the Step Validator today, it won’t become activated until the next epoch begins. The same applies in reverse, where if a staker decides to unstake their SOL, they will have to wait until the current epoch ends for their SOL to be returned to them.
If you’re already a Self-Custodied SOL holder with a Phantom wallet, the easiest way to stake with Step is directly within Phantom's UI. It really takes about 10 seconds and the only notable step beyond clicking the stake button is searching ‘Step Finance’ in the search bar. For maximum simplicity of this guide, we’ve included a Step-by-Step diagram below.
As mentioned above, staking and unstaking SOL occurs between epochs, which are approximately every two days. Your newly staked SOL will become active and begin generating rewards with the Step Validator once the next epoch begins.
Other wallets, such as Solflare have similar UI for staking SOL within the wallet. Staking with Step Finance is possible on any wallet or website that offers the full list of active Solana validators, which is pretty much all the reputable ones. Below we’ll go through three of our favourite sites for delegating SOL and validator analysis.
To unstake your SOL, it’s a similar process done in reverse, with the end step being pressing the now visible ‘Unstake’ button. Once finished the unstaking process, your SOL will be visible in your wallet at the start of the next epoch.
There are several great sites dedicated to bringing the most transparent information on SOL staking and providing a smooth UI for users to research validators and make a decision on where they choose to delegate their SOL. Some of our favourites we recommend using are StakeWiz.com, Validators.app and Staking.Kiwi. These sites provide useful metrics on both Solana network health and specific details of individual validators.
Our friends at StakeWiz created a ranking system for Solana validators they call the WizScore. The WizScore is calculated from over a dozen technical metrics that aim to reward good behaviour and decentralization of the network. StakeWiz has earned a respectable name within the validator community with their website being used as a method to monitor validator credibility and prevent bad actors from operating unseen.
On StakeWiz you can see the full list of active Solana validators here, and search for the Step Finance validator to check out our WizScore, stake changes and other metrics on how we’re ranking among other validators. You can even stake directly with Step’s validator from StakeWiz.
To stake with Step's validator on StakeWiz, connect your wallet and press the +Stake button as seen in the screenshot below.
After pressing +Stake, the staking interface will pop up, where you can input the amount of SOL you choose to stake with Step's validator.
Approve the transaction if you're ready to finalize and delegate your SOL to the Step Finance Validator.
To unstake, head over to the My Stakes tab on the StakeWiz site, where you should see your activating or activated Stake.
If your stake is still unactivated between epochs, you can follow their on deactivation instructions and should be able to withdraw the SOL back to your wallet immediately within 2 transactions.
If your SOL stake has been activated already, after going through the unstaking process, it will be returned to your wallet once the current epoch ends and then new epoch begins. As mentioned earlier, epochs on Solana are generally around 2 days long.
Other sites Validators.App and Staking.Kiwi offer similar services for info on validator details and block production history. They also allow you to stake with the Step Validator from within their website as well.
You can check out and stake with the Step Validator via all three here:
Another great website for Solana network health, decentralization metrics and more in-depth details on things like Solana fee volume and network priority fees, is SolanaCompass.com.
Liquid staking is a great innovation for those looking to unlock more potential from their staked tokens within the DeFi world. Holders of liquid staked SOL can not only self custody their staked SOL, but also continue using it freely within the ecosystem as collateral or to supply liquidity to DEXs while still accruing the staking rewards.
Here we'll explain how a user can stake through Step's validator for bSOL, a liquid staking token and touch on some examples of what liquid staking can offer in the world of DeFi.
There are several dApps on Solana which offer liquid staking tokens in exchange for your staked SOL. The largest being Marinade Finance’s mSOL, which has over 6 million SOL staked across ~450 different validators. There are many other popular options for liquid staking such as stSOL, JSOL and bSOL.
SolBlaze allows users to select a specific validator to stake with in exchange for their liquid staking token, bSOL. In this case, it means a user can stake their SOL with the Step validator and, in turn receive bSOL, a liquid and value accruing asset to be used elsewhere within the DeFi ecosystem.
To stake with Step and receive bSOL, head to the Custom Validators page on the SolBlaze website and locate the Step Finance validator.
Press ‘Stake’ to continue to the staking page.
With your wallet connected to SolBlaze:
Enter the amount of SOL you would like to stake with the Step validator and press the ‘Stake’ button to prompt a wallet transaction.
You will receive a lower quantity of bSOL than the SOL you stake, because the value of bSOL increases in relation to SOL as staking rewards accrue. Once some rewards have been earned, unstaking your bSOL back to SOL will return more SOL than you initially staked. It’s worth noting that there is no need to re-compound rewards with liquid staking tokens, as the token you hold appreciates in value in relation to SOL.
One the first things a user might do with the newly unlocked liquidity of their staked SOL is lend it out to a DEX, such as Orca to earn additional yield on their SOL.
Depositing tokens onto a DEX, such as Orca allows users to earn a share of the trading fees generated by that pool from other users swapping between the tokens, plus any other additional incentivized rewards.
Supplying liquidity on a DEX can be prone to impermanent loss, or other risk factors often uncalculated by new users. Supplying liquidity to a pair like bSOL/SOL can be a relatively safe method of increasing yield on your SOL, as the token pair are relatively pegged to one another. With this yield farming strategy, you're not only earning staking rewards from the bSOL, but also additional yield from Orca trading fees as you supply liquidity for other users.
Another common use for liquid staking is using your bSOL, mSOL or other liquid staked SOL as collateral on a borrow/lending protocol. Doing this, you will earn staking yield on your SOL, with the option to borrow other assets, such as USDC to enable more opportunities for yourself within the composable DeFi ecosystem of Solana.
For more guides on using the Step app and getting comfortable with DeFi, read our other Step Learn guides with the link below.